Real Estate - Liberty Realty Capital Group

Private Equity Funds Are Sitting on $244B for Commercial Real Estate

November 6, 2015 by Randybaconin Real EstateLeave a Comment

Private equity firms are loving them some commercial real estate as funds ended Q3 with $244B of dry powder ready for investments in the industry, Preqin data says. Additionally, private institutional investors are still raising money to bankroll investments in core product in core market—i.e. pricier assets—with 52% of funds focused on North America. “The easy money has clearly been made and pricing is very aggressive,” Vornado CEO Steven Roth says. Vornado holds $555M in property investments and is now focusing on building up its cash reserves from $1B to $2B by the end of the year. Among other funds to keep an eye on, Blackstone Real Estate Partners VIII closed last quarter after raising $15.8B, making it the largest commercial real estate PE fund ever. [CoStar]

Read more at: https://www.bisnow.com/national/news/commercial-real-estate/private-equity-funds-end-q3-with-244b-for-cre-52017?utm_source=CopyShare&utm_medium=Browser

Find out more about Liberty at our Youtube page.

To discuss commercial mortgage financing needs contact Liberty Realty Capital.

Multifamily REITs Cash In

November 3, 2015 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

Leading multifamily REITs are selling off properties—starting with the largest apartment REIT Equity Residential, which announced plans to sell off nearly a quarter of its apartment portfolio on Oct. 26.

“This is an extremely opportune time for Equity Residential to monetize our investments in this portfolio of assets,” said David J. Neithercut, president and CEO of Equity Residential.

REITs usually need to keep growing to help keep their stock prices rising. But leading apartment REITs have become net sellers this year, starting with Equity. The huge deal will dispose of nearly a quarter of Equity’s portfolio of more than 109,000 apartments. In addition, Equity is not planning to spend the cash from the sale on buying other apartments or developing new properties. Instead, the REIT plans to pay down its debt and return a large dividend to its shareholders.

Equity plans to sell more than 23,000 apartments at 72 properties to Starwood Capital Group, through a controlled affiliate, for $5.365 billion. About half of these properties are located in Florida, with other communities in Denver and California’s Inland Empire, in addition to core markets including Washington D.C. and Seattle. Going forward, Equity also plans to sell an additional 26 properties totaling 4,728 apartment units, one at a time or in small portfolios, including all of the company’s assets in Connecticut and in non-core sub-markets of Massachusetts. The sale to Starwood, combined with these other sales, will result in the company’s exit from the South Florida and Denver markets, as well as the New England sub-markets.

“We have also narrowed our focus, which will now be entirely directed towards our core, high-density urban markets,” says Neithercut.

Read entire article in National Real Estate Investor

Find out more about Liberty at our Youtube page

To discuss commercial mortgage financing needs contact Liberty here.

Why Investors Like Carlyle Are Bullish on Trailer Parks

October 30, 2015 by Randybaconin Real EstateLeave a Comment

As investor demand for mobile home parks heats up, especially in areas with high housing demand fueled by tech company growth, Carlyle Group has made its second West Coast buy in the past two months. The equity giant closed on Sunnyvale’s Plaza Del Rey mobile home park last week. Carlyle is reported to have spent around $180M to purchase the 85-acre Plaza Del Rey, which is south of Tasman Drive and west of Lawrence Expressway. The company is among investors grabbing up mobile home rental communities across the nation. Carlyle purchased a majority interest in Pacific Skies Estates in Pacifica last month.

Read more at: https://www.bisnow.com/silicon-valley/news/neighborhood/carlyle-group-buys-second-bay-area-mobile-park-51626?utm_source=CopyShare&utm_medium=Browser

Find out more about Liberty at our Youtube page

To discuss commercial mortgage financing needs contact Liberty Realty Capital Group.

Retailers Focus on Large Distribution Centers, Small Urban Warehouses for Fast Delivery

October 30, 2015 by Randybaconin Real EstateLeave a Comment

As third quarter fundamentals continue to show improvement in the industrial sector, retailers are honing their distribution center strategy to meet current e-commerce demands.

Fundamentals for warehouse space have improved steadily over the past five years. The availability rate for industrial properties declined to 9.6 percent nationally in the third quarter, according to a report from commercial real estate services firm CBRE. Net demand for industrial space is on pace to exceed 200 million sq. ft. this year, and the vacancy rate dropped to 7.3 percent, almost a full percentage point down from the third quarter of 2014, according to report from Cushman & Wakefield. Demand for class-A logistics product will continue to fuel the rapid increase in construction through the rest of the year and into 2016, the Cushman report predicts.

Dwight Hotchkiss, president of brokerage services and the national director of industrial with real estate services firm Colliers, says warehouse demand from retailers has been one of the top reasons for the improved industrial picture. Increased online purchasing, driven by rising smartphone and tablet use, has corresponded with retailer demand for more distribution center space.

However, in the years immediately following the recession, retailers trying desperately to follow Amazon’s example engaged in a jumble of distribution center activity. Same-day delivery of products became the goal, but many companies weren’t sure how to achieve it, or whether they had the capital to invest in the infrastructure necessary to get products out that quickly. Omni-channeling entered the retail and industrial lexicon, as retail chains tried various storage use combinations to get products to customers.

Today, two strategies have emerged, Hotchkiss says: A focus on expanding the “first mile” of distribution, such as building massive distribution centers with advanced robotics and RFID technology, to the “last mile,” where e-commerce retailers are leasing up older or smaller warehouses near urban centers to shorten delivery routes.

“We have an expectation in this digital age of more instantaneous delivery,” he says. “A lot more people today are shopping this way. It takes away from the brick-and-mortar storefront and makes more demands on the warehouse space.”

Read entire article here in National Real Estate investor.

Find out more about Liberty at our Youtube page.

To discuss commercial mortgage financing needs contact Liberty Realty Capital.

Class-B, Suburban Class-A Apartment Properties Gain Momentum

October 29, 2015 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

Class-A apartments in core neighborhoods may no longer be the best investment in today’s market. Vacancy rates are rising for the most expensive apartment communities in urban neighborhoods, research shows.

“The urban class-A market is seeing some pressure. It’s not a crisis by any means, but it’s now an underperforming segment of the market,” says Jay Parsons, an expert with MPF Research, a division of RealPage, Inc., an apartment market intelligence firm. “We expect that to remain the case through 2016 and likely into 2017.”

The pressure is due to the fact that developers are building so many new luxury apartments in urban areas, especially in downtown districts. Vacancy rates are lower and rent growth is steady for apartment communities that don’t have to compete so hard to attract renters—including class-A apartment communities in suburban areas, where there isn’t so much new construction, and class-B apartment communities everywhere.

“Class-A vacancy rates will continue to rise, while class-B vacancy should decline as few developers build class-B buildings,” says Barbara Byrne Denham, economist with New York City-based research firm Reis Inc. “Rents should continue to rise, although the rate of growth for class-A rents will be lower than it has been. The rate of growth for class-B rents should stay the same.”

Vacancy rates fall for class-B apartments

Usually, class-A communities have significantly fewer vacant apartments than class-B communities. Over the last dozen years, from 2003 to present, the class-A apartment vacancy rate averaged 5.2 percent. That’s 40 basis points lower than the vacancy rate for class-B apartments. But that difference has vanished as class-B apartments catch up to class-A—both had an average vacancy rate of 4.9 percent over the last two years, according to data firm Axiometrics Inc.

Read entire article in National Real Estate Investor here.

Find out more about Liberty at our Youtube page.

To discuss apartment mortgage financing needs contact Liberty here.

Everything You Need to Know About Commercial Solar

October 26, 2015 by Randybaconin Real Estate, TechnologyLeave a Comment

As the price of solar panels continues to drop–they’re already 80% lower then in 2008–more commercial companies are finding several reasons to switch over. Actually, make that several billion reasons. The commercial sector consumes more than 1.3 trillion kWh each year, and since the average electricity rates for commercial users have inched up more than 20% in the past 10 years—from $0.08/kWh to more than $0.10/kWh—that adds up to an increase of tens of billions of dollars in utility bills. So it definitely makes sense for companies to generate their own electricity. So much so, that it could become the top source of electricity by 2050.

The Challenges

But while the benefits are promising, there are still some challenges. For starters, there’s always a possibility that Congress won’t extend a 30% tax credit for solar power beyond 2016. That would deliver a financial blow to commercial and utility scale projects. Meanwhile, smaller commercial companies are already facing the hurdle of high upfront costs. Fortunately, solutions like third-party ownership—where a third-party takes on the initial costs of designing, constructing and owning the solar system, then sells the electricity to the customer at lower rates—help mitigate that problem. Then there’s the issue of land. The National Renewable Energy Laboratory (NREL) estimates that a 100% solar America would require solar installations on up to about 0.6% of the country’s total land area. Or roughly the size of West Virginia.

Read more at: https://www.bisnow.com/national/news/energy/everything-you-need-to-know-about-commercial-solar-51455?rt=title?utm_source=CopyShare&utm_medium=Browser

Find out more about Liberty at our Youtube page.

To discuss commercial mortgage financing needs contact Liberty Realty Capital.