By Michael Tucker
Industrial activity ‘surged' in the third quarter, led by demand from the third-party logistics and packaging industry, reported Colliers International, Toronto.
By Michael Gerrity
According to new research by global property consultant CBRE, more commercial real estate investment capital crossed U.S. borders in both directions during H1 2018, with foreign inflow up by 29% from the first half of 2017, and U.S. outflow up by 15% in H1 of 2018.
On net, the U.S. commercial real estate market had a capital surplus of roughly $12 billion. Savvy foreign investors have several strategies to mitigate foreign exchange risk when acquiring U.S. assets, one of which is purchasing forward contracts to hedge against U.S. dollar depreciation.
French company Unibail-Rodamco's acquisition of Westfield, which included a $7.7 billion shopping mall portfolio, elevated inbound capital flows from REITs and France, as well as foreign retail acquisitions, to record highs.
CBRE further reports the cost of hedging against U.S. dollar depreciation is rising worldwide, reducing effective yields for many foreign investors, despite the continuing attractiveness of the U.S. market in growth and liquidity terms. Inbound capital flows have eased in the past 24 months, providing more opportunities for domestic investors.
Visit any urban center in a major U.S. city and you'll see a similar view: cranes dotting the landscape and billboards advertising units in the latest luxury apartment projects. Has the focus on high-end units gotten out of hand?
New research from RentCafe found that luxury rental properties had accounted for 79 percent of all apartment construction in the U.S. And in the 2018 that number has grown to a whopping 87 percent. In many cities, a full 100 percent of projects completed in the first half of the year were upscale units.
By Michael Tucker
A record number of e-commerce retailers opened physical stores last year and 850 more are set to open in the next five years, reported JLL, Chicago.
By William Maher
Real estate economists continue to have a generally bullish outlook for the U.S. economy, capital markets, and real estate fundamentals. Overall, expectations have improved since the prior forecast in March 2018, and the strong second-quarter gross domestic product (GDP) growth rate of 4.2 percent was fresh in forecasters’ minds as they weighed in on future years. Based on this forecast, the U.S. economy will easily surpass the current record for length of expansion (120 months) in mid-2019. Consistent with a strong economy, key real estate metrics—such as NCREIF Property Index (NPI) returns and transaction volumes—moved moderately higher in this survey. While expectations have improved, the survey was completed prior to recently announced tariffs by the United States and China that could curtail growth in 2019 and possibly beyond. While there are many potential outcomes for the current trade dispute, escalated tariffs with China could dampen the next round of forecasts in April 2019.
The Appraisal Institute, the nation’s largest professional association of real estate appraisers, today encouraged home sellers to consider making energy-efficient improvements to their properties and urged potential buyers to seek homes with those features.
“The latest research shows that green and energy-efficient home improvements have the potential to pay dividends for buyers and sellers,” said Appraisal Institute President James L. Murrett, MAI, SRA. “However, it depends on the improvements made. Some green renovations, such as adding Energy Star appliances and extra insulation, are likely to pay the homeowner back in lowered utility bills relatively quickly.”
Additionally, by purchasing an energy-efficient product or renewable energy system for a home, the owner may be eligible for a federal tax credit based on EPA-established guidelines.
Three recent studies confirm that green homes sell for more than non-green properties:
Existing-home sales subsided for the fourth straight month in July to their slowest pace in over two years, according to the National Association of Realtors®. The West was the only major region with an increase in sales last month.
Total existing-home sales1, https://www.nar.realtor/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.7 percent to a seasonally adjusted annual rate of 5.34 million in July from 5.38 million in June. With last month’s decline, sales are now 1.5 percent below a year ago and have fallen on an annual basis for five straight months.
Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that mortgage rates decreased slightly for the second consecutive week.
Sam Khater, Freddie Mac’s chief economist, says mortgage rates remained mostly flat over the past week, which has been the dominant theme since late spring. “This stability in borrowing costs comes despite the highest core inflation rates since 2008 and turbulence in the currency markets,” he said. “Unfortunately, this pause in rates is not leading to increasing home sales.”
A new analysis by Freddie Mac (OTCQB: FMCC), finds that the strong performance experienced by the multifamily market in the first half of 2018 will continue throughout the end of the year and well into 2019. The findings were released as part of Freddie Mac Multifamily’s 2018 Mid-Year Outlook pdf and companion video. The Outlook predicts that in 2018, multifamily origination volume is expected to grow by 3.3 percent to $305 billion.
In the Outlook, Freddie Mac Multifamily Research and Modeling vice president Steve Guggenmos and manager Sara Hoffmann find that overall, the multifamily market continues to experience very healthy performance. While fundamentals have started to moderate over the past few years, the factors most critical to market strength continue to remain strong, for example, with rents rising above inflation and vacancy rates only increasing slowly.
By Michael Tucker
Commercial real estate executives see "balanced and stable" market conditions despite growing concerns the market could be nearing the end of its current cycle, the Real Estate Roundtable reported.
Written by Michael Tucker
Commercial real estate asset prices have "plateaued" and transaction volume has moderated as the real estate cycle matures, reported Green Street Advisors, Newport Beach, Calif., and CoStar, Washington, D.C.
Some Fed districts reported moderate improvements in the residential real estate sector, but their reports on commercial activity revealed largely stagnant conditions, the Federal Reserve reported July 18 in its newest Beige Book.
Written by Kelsey Ramirez
Last Wednesday, Federal Reserve Chair Jerome Powell had his second hearing this week, this time before the House Committee on Financial Services for his semi-annual monetary policy report.
Written by Ben Lane
We’ve known that the rent may be too high for quite a while now, but a new report shows that rent has never been this high before.
