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The Amazon Effect: Warehouse Rents Shot Up In 2015

May 16, 2016 by Randybaconin Real EstateLeave a Comment

The e-commerce boom is pushing up demand for US warehouse space, leading to rent growth in the sector. Rents for prime US warehouse space rose 9.9% in 2015 compared to just 2.8% worldwide, according to CBRE, as retailers and distributors grabbed facilities near import hubs and population centers. Six US markets were in the top nine worldwide for rent growth, with Oakland seeing the fastest spike, at 29.8% year-over-year—almost twice the rate of the white-hot northern NJ market, the Wall Street Journal reports. CBRE’s head of Americas industrial and logistics research, David Egan, says new construction can’t keep up with the demand boom fueled by e-commerce, and he expects the supply gap to continue, pushing rents in top markets up another 6%. “There are huge premiums being placed right now on being close to the consumer,” David tells the Wall Street Journal. “Speed of service, speed of delivery, is a critical component of why people choose to buy from one retailer over another.”

Read entire article at Bisnow.com

Regulatory Costs Account for Quarter of a New Home’s Price

May 12, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

According to a new study released this week by the National Association of Home Builders (NAHB), on average, regulations imposed by all levels of government account for 24.3 percent of the sales price of a new single-family home in the U.S. in 2016.

Breaking down the total regulatory costs further, the study revealed that three-fifths of this–14.6 percent of the final house price–is due to a higher price for a finished lot resulting from regulations imposed during the lot’s development. The other two-fifths–9.7 percent of the house price–is the result of costs incurred by the builder after purchasing the finished lot.

“This study demonstrates the type of over-regulation our industry is facing,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “Not only is it inhibiting builders’ ability to produce competitively priced homes in a still recovering housing market, but this regulatory burden trickles down to the consumer level and prices many would-be buyers out of the market.”

While NAHB’s previous regulatory estimates in a 2011 study were fairly similar, the price of new homes increased substantially in the interim. When applying these percentages to Census data on new home prices, the data show an estimate that regulatory costs in an average home built for sale went from $65,224 to $84,671–a 29.8 percent increase during the roughly five-year span between NAHB’s 2011 and 2016 estimates. Meanwhile, disposable income per capita in the U.S. increased 14.4 percent during that same time period, meaning that the average cost of regulation embodied in a new home is rising more than twice as fast as the average American’s ability to pay for it. –

See entire article in World Property Journal

5 Tips to Get the Most Cash Out of Your Small Apartment Property

May 11, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

If you own a small multifamily property—now, more than ever—it’s good to be you. For the better part of a decade, a robust multifamily market has delivered low vacancies and higher rents. Post-recession, 2015 has been the strongest year for the rental market so far¹.

With apartment values up more than 120 percent since the end of 2009², lenders are sharpening their pencils to meet another growing demand: owners of small apartment communities looking to capture market improvements by refinancing.

Indeed, now is a great time for a mortgage reboot, especially if your loan was originated in more difficult economic times. Multifamily market growth is ongoing and rates are still near historic lows. Without the right preparation, though, you could find yourself short-changed.

Here are five tips to help you put the most cash in your pocket:

1. Aim for Accuracy.

Keeping accurate financial statements for your property is essential. If your records are spotty, it’s difficult for lenders to accurately size a loan, which could reduce the cash you take away from the deal. To get the most bang for your buck, make sure you have at least three years of historical annual operating financial statements and monthly rent rolls. If you made any capital improvements in the past, be sure you include explanations on your statements.

View entire article here in National Real Estate Investor

To find out more about our multifamily financing options click here or visit us at Liberty Realty Capital.

Outlook for Seniors Housing Sector Remains Bullish

May 10, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

A growing development pipeline is not dampening the outlook for the seniors housing sector. Exclusive research conducted jointly by NREI and the National Investment Center for Seniors Housing & Care (NIC) shows that industry participants remain optimistic about improving fundamentals and investment opportunities in the sector.

The big story of late in the seniors housing sector has been the uptick in construction. In fact, the greatest number of units came online in the second quarter of this year compared to any other quarter in the past six years. As of the second quarter, construction versus inventory over the previous 12 months grew by 4.2 percent for seniors housing and 0.7 percent for nursing care, according to NIC data.

The majority of survey respondents (69 percent) anticipate more construction starts ahead in the coming 12 months, with 55 percent who predict that construction starts will increase somewhat and 14 percent who believe that construction starts will increase significantly

Yet the majority of respondents also believe that the new supply remains in check with demand. Nearly two-thirds of respondents do not think that the construction will result in overbuilding compared to the one-third who are concerned that overbuilding will occur. The upside of the story is that demand has been matching that new supply. “So the outlook is fairly bullish in that even though there is new product coming into the market, demand will be there to fully absorb that product,” says NIC Chief Economist Beth Mace.

Also, it is important to note that the new supply is not widespread, but rather limited to certain markets. NIC tracks seniors housing market data in 99 metropolitan areas. According to NIC, there are about 35 markets that represent about 80 percent of all the construction activity in the U.S. “So, in general, construction remains relatively concentrated,” says Mace.

About 20 percent of those metropolitan areas had no seniors housing construction during second quarter. However, at the other end of the spectrum, some markets saw a spike in activity at a rate of more than 15 percent in expansion relative to existing inventory, including San Antonio, Salt Lake City, Austin, Houston and Sacramento.

Find entire report here at National Real Estate Investor.

Inside Real Estate Crowdfunding

May 9, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

(Bloomberg)—Last month a Houston-area entrepreneur took to Craigslist with a surprising offer: For $50,000, the author of the listing would part with 5 percent of a real estate crowdfunding startup that he said would generate profit within three months. It doesn’t take a lawyer to suggest that Craigslist might be a bad place to source startup investments. (The author of the post wasn’t available for comment when this story went to press.) But the post illustrates what some real estate investors have noticed: These crowdfunding platforms are everywhere.

Inside the Real Estate Crowdfunding Land Rush

Investors used U.S. real estate crowdfunding platforms to pour $484 million into real estate projects last year, according to research published last month by the Cambridge Judge Business School. That’s more than three times the amount in 2014. Meanwhile, the U.S. has more than 125 real estate crowdfunding sites, according to Jason Best, a partner at Crowdfund Capital Advisors, who helped conceive the framework for crowdfunding. Less than three years after the JOBS Act made it legal to solicit investments online, real estate crowdfunding sites are all over the place.

Kind of.

The idea behind crowdfunding, whether for gadgets on Kickstarter or medical procedures on GoFundMe, is to create an online place where people who need money can meet people who have it. In the case of real estate, that often means house flippers who buy, renovate, and sell single-family homes seeking loans from accredited investors—roughly speaking, people who make enough money that they can afford to lose some of it. Some platforms also let investors buy equity stakes in real estate projects or fund loans for larger commercial projects. At least two companies, Washington-based Fundrise, and Atlanta-based GroundFloor, have created mechanisms to let anyone invest, not just rich people.

View entire article at National Real Estate Investor

To find out more about various real estate financing options contact Liberty

Changes in Mortgage Financing

May 8, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

There’s no doubt that now is an interesting time in the mortgage market for multifamily assets located in secondary locations, brimming with potential, promise and uncertainty. With cap rates compressed in the majority of primary markets located in coastal cities across the U.S., many of the industry’s largest players are turning to secondary markets for opportunities to purchase properties with higher growth, and therefore yield potential. This is driving aggressive capital activity in these markets and resulting in upward pressure on multifamily rental rates.

These trends are resulting in significant growth potential across properties located in secondary markets that have been tempered by other large-scale market factors in the GSE and commercial spaces as the industry determines its “new normal” and adapts to the changes being brought about by the global economy and investment activity.

The secondary mortgage market today—promise through the shifts

While the demand for mortgages against properties in secondary locations has experienced strong growth over the past four years, key aspects of its character are experiencing historic shifts. One of the best examples of this is within the central region of the country, in cities like Oklahoma City, Okla., and secondary markets throughout Texas, where the availability of capital has been very strong because of the growth of the oil and gas industries. As those employment markets have grown weaker as a result of falling oil and gas prices worldwide, the mortgage market outlook in those areas is also waning, requiring a more conservative investment approach and allowing other previously less attractive secondary markets to take center stage.

View entire article in National Real Estate Investor

To find out more about our multifamily financing visit Liberty Realty Capital here.