Tag: commercial mortgage financing

Multifamily REITs Cash In

by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment on Multifamily REITs Cash In

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

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

by Randybaconin Real EstateLeave a Comment on Retailers Focus on Large Distribution Centers, Small Urban Warehouses for Fast Delivery

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.

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The 11 Largest EB-5 Projects in America

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The 11 Largest EB-5 Projects in America

The EB-5 Program allows for foreign investors to have stakes in US developments while also reducing costs for US developers and helping to create regional jobs. So far, $3.7B has streamed into major US cities, such as NYC and San Francisco. “EB-5 is an alternative source of funding for good projects and to create more jobs quicker,” US Immigration Fund VP Nicholas Mastroianni tells Bisnow. “It allows them to free up capital to do more projects.” Here are 11 of the largest and most important projects funded by EB-5 in the country.

Read more at: https://www.bisnow.com/national/news/commercial-real-estate/top-eb-5-projects-51067#0?utm_source=CopyShare&utm_medium=Browser

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The Cost of Operating a National Shopping Center

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The Cost of Operating a National Shopping Center (Chart of the Week)
The Institute of Real Estate Management (IREM), an international community of real estate managers, collected the national median income for open shopping centers based on average actual occupancy (AAO). The findings range from $15.28/SF to $25.45/SF. The Northeast and Mid-Atlantic regions reported the highest income/SF for open centers. The individual expense categories represent open shopping centers by proportion of total operating cost based on AAO. Insurance and taxes accounted for 45% of total operating costs; services consumed 14.2%; maintenance and repair and utilities accounted for 8% and 8.7%, respectively.
Click here to download the full report.

Read more at: https://www.bisnow.com/national/news/retail/the-cost-of-operating-a-national-shopping-center-chart-of-the-week-51121?rt=title?utm_source=CopyShare&utm_medium=Browser

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Investors Score High Yields for Older, Less-Expensive Rental Homes

by Randybaconin Real EstateLeave a Comment on Investors Score High Yields for Older, Less-Expensive Rental Homes

In many markets, high rents and relatively low home prices are providing solid investment returns for single-family home rentals.

“It’s still a good time to buy rental single-family homes,” says Daren Blomquist, vice president with data firm RealtyTrac.

The highest yields for these types of properties can often be found in secondary and tertiary neighborhoods in secondary and tertiary markets, however, far away from the places where the largest institutional investors have bought their thousands of rental homes. Somewhat older homes in older neighborhoods are benefiting from rent growth and strong demand for rental housing.

The deals are out there

The rents are rising at single-family rental homes across the country. Rental rates on new leases rose an average of 4.5 percent nationally over the past year, up from a rate of 3.4 percent in July 2014.

“Strong job growth and historically high occupancy rates are fueling higher rents,” according to John Burns Real Estate Consulting.

The average investment return on rental homes is strong and getting stronger. The average gross rental yield is nearly 9 percent, according to the latest report from RealtyTrac.

Read entire article here in National Real estate Investor.

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Weyerhaeuser Launches $190M Dierks Sawmill Project

by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment on Weyerhaeuser Launches $190M Dierks Sawmill Project

One of the oldest sawmill operations in the state is undergoing a $190 million rebirth at its historic southwest Arkansas home. Site preparation for the new Weyerhaeuser complex at Dierks (Howard County) is winding down as the project shifts into a new phase of construction.

“We’re in the process of setting up the concrete batch plant,” said Scott Copas, president and CEO of Little Rock’s Baldwin & Shell Construction Co. “We’ll be starting work toward the end of the month.”

The new facility will have an annual production capacity of 387 million board feet, 25 percent more than current capabilities.

A joint venture of Baldwin & Shell and Bass Commercial Concrete LLC of Little Rock will oversee the production and pouring of 40,000 cubic yards of concrete during the next 16-18 months.

The new sawmill will adjoin the east side of the current location, where lumber production has occurred continuously for more than 100 years. The old facility will continue production on the west side of Holly Creek until the new one is fully operational.

Weyerhaeuser employs about 250 at the Dierks complex, which generates jobs for scores of loggers who cut and transport timber to supply the sawmill.

Four drying kilns will be the first piece of the new complex to come on line. The old facility will be demolished in phases, just as the new one is built in phases.

View entire article on Arkansas Business here.

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