Tag: commercial real estate

Capital Spigot Is Wide Open

by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment on Capital Spigot Is Wide Open

Borrowers are reveling in a market where capital is both cheap and plentiful, and even an expected rise in interest rates is not likely to take the wind out of the sails of the current robust lending climate.

“We’re enjoying the benefits of a great market,” says Ernie Katai, executive vice president and head of production at Berkadia, a commercial real estate company. Although 2014 was a record year for the firm in financing, year-over-year volume surged another 70 percent in 2015. Part of that jump can be attributed to a single $5.1 billion portfolio transaction. But excluding that deal the firm’s numbers would still be up 40 percent for the year, notes Katai.

Based on overall market liquidity, that momentum is expected to carry over into 2016. Lenders are keeping an eye on international headlines, notably the recent terrorist attacks and continued threats in Europe. However, lenders and financial intermediaries remain optimistic about the coming year. “Short of something outside of our control happening, the market for 2016 looks poised for another strong year,” Katai says.

Read entire article in National Real Estate Investor online here http://nreionline.com/finance-investment/capital-spigot-wide-openhttp://nreionline.com/finance-investment/capital-spigot-wide-open

To discuss commercial mortgage financing needs contact Liberty Realty Capital.

 

Shrinking U.S. Shopping Malls Get Makeovers

by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment on Shrinking U.S. Shopping Malls Get Makeovers

Visitors used to flock to the Highland Mall in Austin, Texas, around the holidays to stroll through the city’s first enclosed shopping complex and admire the giant Christmas tree crafted from poinsettia plants.

But this holiday season, no shopping will be done there. Workers are converting the 600,000-square-foot structure into a campus for Austin Community College with classrooms, lab space and a culinary arts center.

Austin’s economy is strong and its population swelling, but Highland couldn’t attract enough shoppers to stay afloat.

“Competition came up and killed it,” said Matt Whelan, principal at developer Red Leaf Properties LLC, which is working with the college on the project.

An era of relentless expansion for American shopping centers is coming to an end as a toxic brew of overbuilding, the rise of e-commerce and a wave of retailer bankruptcies force landlords to reimagine once-lucrative properties.

Some owners are converting struggling malls into apartments, offices and industrial space, while others are turning big chunks of retail space into parks and playgrounds to keep shoppers interested.

“You have to create an environment that people want to come to,” said Tony Ruggeri, who eliminated about 50,000 square feet of retail space to create an open-air plaza at West Manchester Town Center in York, Pa., which reopened last year.

View entire article here in the Wall Street Journal.

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

Online Shopping Tops Brick-and-Mortar on Black Friday Weekend

by Randybaconin Real EstateLeave a Comment on Online Shopping Tops Brick-and-Mortar on Black Friday Weekend
Online Shopping Tops Brick-and-Mortar on Black Friday Weekend
More shoppers did their holiday deal hunting online than in stores, a National Retail Federation survey reveals, with 57% of those shopping on their cell phones. Despite malls being quieter than usual, Black Friday sales still jumped 14% over last year–spending $4.45B total–underscoring a dramatic shift in shopping habits in recent years, the Wall Street Journal reports. On the brick-and-mortar end, holiday sales totaled $12.1B, a dip from last year. “This holiday may be a wake-up call for store-based retailers,” retail consultant at PricewaterhouseCoopers Steve Barr says, “to recognize they are going to have to transform their store models to compete with online retailers.” [WSJ]
Online sales coming from large retailers like Amazon and Wal-Mart and a growing number of smaller online retailers like osiyo computers and video games
Read more at: https://www.bisnow.com/national/news/retail/online-shopping-tops-brick-and-mortar-on-black-friday-weekend-53008?utm_source=CopyShare&utm_medium=Browser

Scarce Labor Drives Construction Costs for Multifamily Developers

by Randybaconin Real EstateLeave a Comment on Scarce Labor Drives Construction Costs for Multifamily Developers

The good news for the multifamily industry is that the cost of construction materials is very low. The bad news is that skilled construction workers are increasingly expensive and hard to find.

“I’m pretty optimistic that materials costs are going to stay low and maybe get lower,” says Ken Simonson, an economist with Associated General Contractors of America, an industry trade group. “My number one concern is the availability of labor.”

The U.S. economy is relatively strong—at least compared to the rest of the world. From Asia to Europe, economies around the world have struggled this year, driving down demand for products bought and sold on the global market, from oil and steel to concrete. But here in the U.S., unemployment is low. The price of labor needed to build large projects is high and rising, often wiping out the cost benefit of cheaper materials.

Overall costs rise

The prices contractors charge for construction projects, including the cost of labor, rose slowly but significantly this year, according to the U.S. Bureau of Labor Statistics. The overall producer price index for the construction of new non-residential buildings climbed 1.8 percent over the year that ended September 2015. (Costs for “non-residential” construction do not include single-family homes, and include many of the same materials and labor as large apartment developments, especially high-rise apartment buildings.)

The 12-month increases ranged from 0.2 percent for healthcare construction to 1.8 percent for schools to 1.9 percent for warehouses and industrial buildings and 2.4 percent for office buildings.

Worldwide demand for many commodities has fallen over the last year and that makes those goods less expensive in the United States.

Read entire article in National Real Estate Investor here.

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To discuss commercial mortgage financing needs contact Liberty.

Mall Owners Find Silver Lining in Retailer Busts

by Randybaconin Real EstateLeave a Comment on Mall Owners Find Silver Lining in Retailer Busts

A spate of retailer bankruptcies this year has left owners of malls and shopping centers scrambling to fill empty stores. But some landlords smell opportunity.

The vast majority of these type of properties are occupied and spare space is in short supply in many parts of the country, according to experts and landlord data. That is boosting the confidence of landlords who believe they can find new tenants and charge them higher rents.

RadioShack was the largest retailer by assets with publicly traded stocks or bonds to file for bankruptcy since 2010. A former Radio Shack store in the Bronx, New York
 Photo: Michael Nagle/Bloomberg News

After grocery chain A&P, filed for bankruptcy in July, for example, Brixmor Property Group Inc. said it bought back three leases in a bankruptcy auction under which the grocer, formally known as Great Atlantic & Pacific Tea Co., was paying an average of $6.59 a square foot. The firm, which owns shopping centers in 38 states, will be able to charge new tenants $20 to $30 a square foot, says Michael Carroll, chief executive.

See entire article in the Wall Street Journal.

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To discuss commercial mortgage financing needs contact Liberty.

After Leading CMBS Out of Recession, Retail Loans Slower To Refinance

by Randybaconin Real EstateLeave a Comment on After Leading CMBS Out of Recession, Retail Loans Slower To Refinance

For all of their success in leading a resurgence of CMBS financing following the Great Recession, retail properties face a tougher rode ahead in the short term.

Approximately $50 billion of retail-backed CMBS loans are scheduled to mature through 2016. Collateral backed by retail properties accounts for the largest portion of that, its also accounts for the largest proportion of loans defaulting at their 2015 maturities, according to Fitch Ratings.

For loans with original maturities in 2015, retail comprises the majority of the currently delinquent loans ($555.2 million) followed by office ($469 million). Other property types have far lower levels of deliquent loans, including hotel ($162.9 million), mixed use ($161.9 million), multifamily ($44.6 million), industrial ($12.4 million), and self-storage ($6.5 million).

Read the entire article at www.Costar.com.

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