ten must reads rent surge

10 Must Reads for the CRE Industry Today (July 18, 2016)

 

  1. Trump Or Clinton? Real Estate Investors Should Do Well With Either “By many metrics, the United States has been under-investing in infrastructure. Sharp increases in the cost of infrastructure is a major factor. Amid a wave of populism, major federal infrastructure spending is a central tenant of both major political parties. Both Clinton and Trump have outlined intentions to dramatically increase infrastructure spending. Clinton proposes $275 billion, Trump proposes $1 trillion. This major jobs project comes at a time of a significant shortage of construction workers, where unemployment is at multi-decade lows. We theorize there will be a squeeze on availability of construction workers, pushing up wages, crowding-out private development projects, and further repressing speculative private construction.” (Seeking Alpha)
  2. Blackstone plans to go public with country’s largest single-family home landlord “The Blackstone Group plans to go public with the largest single-family rental company in the country. Blackstone bought Invitation Homes, which oversees about 50,000 houses across the country, in the wake of the housing bust. But while others in the industry went public with less-than-stellar returns, Blackstone sat by and watched. The company is now planning to take Invitation Homes public as a real estate investment trust, though the exact size and time of the offering was not immediately clear, according to Bloomberg. “Shares of home-rental companies have been surging as apartment owners take a hit. American Homes 4 Rent, the second-largest single-family landlord behind Invitation Homes with about 48,000 properties, has surged in value by 26 percent this year.” (The Real Deal)
  3. Ohio ranks among best in commercial real estate development “Ohio ranks as a top state for commercial real estate development, a sector that supported 3.2 million jobs and contributed $450 billion to the U.S. economy in 2015. A new report from the NAIOP Research Foundation found that 429.4 million square feet of commercial real estate space was built in 2015, with the capacity to house 1.1 million new workers. ‘Commercial real estate continues to bring new jobs, improve infrastructure, and create places to live, work and play,’ said Thomas Bisacquino, NAIOP president and CEO. ‘This is positive news both for the industry and the nation, but clarity on budget policy and tax reform following the presidential election will provide more certainty and add to the confidence of developers and investors.’” (Dayton Daily News)
  4. Rents continue surge, prompting new affordability ideas “Meanwhile, many more Americans will be renters than homeowners in the future, most housing analysts believe. A recent study from the Joint Center for Housing Studies at Harvard University noted that the number of renter households jumped by 9 million from 2005 to 2015, the biggest decade-long increase on record. And that may be accelerating: 2015 marked the biggest yearly gain ever, as renter households increased 1.4 million. There are many reasons for the increase: aging baby boomers are selling their homes and opting to rent, many young people are saddled with student debt, and memories of the housing bust make some people wary of owning. What’s more, mortgage credit and the supply of homes available for purchase remain constrained, taking homeownership out of reach of those who’d prefer it. The unprecedented affordability crunch is renewing interest in creative strategies for addressing it. The national nonprofit organization NeighborWorks America believes the supply-demand paradigm requires a rethink. ‘While it’s really critical to be adding supply, it’s also critical to preserve what we’ve already got,’ said Frances Ferguson, director of real estate enterprise strategies for the group.” (MarketWatch)
  5. Taipei 101 Tower Named World's Greenest Tall Building “‘Going Green’ is going taller with Taipei 101 skyscraper earning the title this week of world's Greenest tall building. CBRE and TAIPEI 101 have ushered in a new era for international green buildings, becoming the highest scoring LEED v4 project in the world to-date, and the first to reach the 90 points threshold. TAIPEI 101 appointed CBRE's Sustainability Asia team to act as LEED consultant to guide them through the process of recertifying its existing LEED v2009 Platinum certification in September 2014. Leadership in Energy and Environmental Design (LEED) is a green building rating system developed by the US Green Building Council (USGBC) that has gained prominence on a global scale. Across Asia some 6,700 projects of varying types, from interior fit outs to neighborhood developments, have been registered to-date. More than 2,100 projects have gone on to be LEED-certified as green buildings.” (World Property Journal
  6. Argentina probes ties between ex-presidents, Miami real estate empire “Where did a mystery man from Argentina get nearly $65 million to spend on ultra-luxury Miami condos, New York apartments and South Florida strip malls? That’s what Argentine prosecutors want to know, especially because Sergio Todisco doesn’t seem to have a fortune of his own — and because he once acted as an offshore corporate front-man for a top aide to former president Néstor Kirchner. The controversy again shows how Miami’s gleaming condos attract secret and potentially illicit money from around the world. Between 2010 and 2015, Florida companies registered in the names of Todisco and his now ex-wife, Elizabeth Ortiz Municoy, a real estate agent in Miami and Buenos Aires, spent about $21 million on luxury condos at some of South Florida’s best-known towers, including Icon Brickell, St. Regis, Turnberry Ocean Colony, Apogee Beach and 900 Biscayne. The crown jewel was a $10.7 million, four-bedroom unit at the Regalia in Sunny Isles Beach. The companies later sold most of the units. Other companies that listed Todisco and Municoy as officers invested $30 million in South Florida bank branches and a pharmacy, as well as a $13 million unit at Manhattan’s stately Plaza Hotel. Only two of the transactions involved mortgages, according to public records, meaning the other deals were likely for cash.” (Miami Herald)
  7. Yardi Matrix: Dynamic Triangle “North Carolina’s Triangle metro—which encompasses Charlotte and Raleigh-Durham—has been one of the more dynamic areas of the country in recent years. Local universities have produced a wealth of highly educated workers, while the area draws residents due to its low housing costs and temperate climate. The combination of job and population growth has produced extremely strong demand for apartments. The question now is whether demand will continue to be enough to absorb the heavy supply pipeline. But the metro’s robust job growth continues, with 58,200 positions added in the 12 months ending in April, led by business services, trade and transportation, and hospitality. The Research Triangle technology center is a focal point of the growth, given its role as a hub for the shipping of mail-order products, a growth industry in the Internet age.” (Commercial Property Executive)
  8. New report calls for ‘justice for millennials’ “The Millennial generation, or those aged between 16 and 35, are earning less than previous generations - the first time this have ever happened - and are less likely to own a home, according to a new report. The report, ‘Stagnation Generation,’ calls for the social contract between young and old generations to be renewed, as millennials are at risk of becoming the first generation to earn less over their lifetime than earlier generations…Meanwhile, young people are failing to get onto the property ladder. The report claims someone from the baby boomer generation at the age of 30 was 50 percent more likely to own their own home than a millennial of the same age. ‘Millennials are spending an average of £44,000 [$58,000] more on rent in their 20s than baby boomers did,’ the report warns. (CNBC)
  9. Bernards Starts Construction on $100M Ultra-Luxury Senior Housing “Commercial builder Bernards has started construction on a Laguna Nigel, Calif., senior living development called Crestavilla. The $100 million ultra-luxury retirement community slated for completion in November 2017 has been designed to deliver a range of services rivaling that of a five-star hotel. The 211,387-square-foot development set on 11.5 acres of lush, manicured grounds will feature 112 independent living and 72 assisted living units, as well as 36 memory care beds. Three levels of above-grade residential living and one below-grade parking level will comprise the development. Laguna Nigel is about 55 miles southeast of Los Angeles.” (MultiHousing News)
  10. Jack Resnick & Sons refis One Seaport with $295M AXA loan “Jack Resnick & Sons landed a $295 million loan to refinance its One Seaport Plaza, not to be confused with that other 1 Seaport building. AXA Equitable Life Insurance Company issued the loan to refinance the Midtown-based landlord’s 35-story office tower at 199 Water Street, records filed with the city Friday show. The package includes a new $55 million loan and replaces an existing $240 million mortgage from Morgan Stanley. Scott Singer at the Singer & Bassuk Organization arranged the financing. The building, built in 1984, is fully leased. Insurance company Aon anchors the property with nearly 450,000 square feet.” (The Real Deal)
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