For Some Family Offices, Now Is the “Buying Opportunity of a Century” When It Comes to CRE via NREI

As America grapples with the coronavirus-impaired economy, family offices are feeling the same uncertainty as other investors are. In some cases, it means it’s time for them to selectively search for commercial real estate opportunities. In other cases, it’s time to pause investment activity.

For investors who want to act rather than stand still, execution of acquisitions and sales has been hampered by market volatility and illiquidity, says Randy Hubschmidt, managing partner of Fortis Wealth, a multi-family office in King of Prussia, Penn. He’s seen deals extended or canceled altogether due to the inability to wrap up previously approved financing.

Read more...For Some Family Offices, Now Is the “Buying Opportunity of a Century” When It Comes to CRE via NREI

Texas Economic Activity Suddenly Contracts in March; Outlook Worsens Due to COVID-19 via Dallas Fed

The economic downturn in Texas has begun, recent data suggest. The coronavirus (COVID-19) outbreak initially affected manufacturers and retailers with supply lines in China. The virus’ subsequent arrival in the U.S. has produced a severe drop-off in demand for large parts of the service sector.

Some of the demand declines have intensified due to public health measures, such as social distancing and shelter-in-place policies. Additionally, record-low oil prices and the prospect of sustained depressed levels in the energy sector will further slow growth in Texas.

Before the COVID-19 outbreak in the U.S., economic activity in Texas had broadly improved. Service sector revenue and manufacturing production increased in January and February.

Read more...Texas Economic Activity Suddenly Contracts in March; Outlook Worsens Due to COVID-19 via Dallas Fed

Texas Service Sector Outlook Survey March 2020 via Dallas Fed

The Texas service sector saw a dramatic decline in March amid the ongoing coronavirus (COVID-19) pandemic and related measures, according to business executives responding to the Texas Service Sector Outlook Survey. The revenue index, a key measure of state service sector conditions, plummeted from 14.0 in February to -67.0 in March, an all-time low reading for the survey.

Labor market indicators reflected a sharp contraction in employment and significantly shortened workweeks. The employment index fell from 6.1 to -23.8, its lowest reading on record. The hours worked index drastically dropped over 47 points to -43.0, with nearly half of respondents noting a cut in employee hours.

Read more...Texas Service Sector Outlook Survey March 2020 via Dallas Fed

Will coronavirus permanently change CRE lending? via American Banker

The economic paralysis from the coronavirus outbreak could upend commercial real estate and accelerate loan losses for banks.

High vacancies are hurting hotels, while closed retail outlets are poised to cause headaches for malls and shopping centers. Offices could struggle over the long run as more Americans work remotely and employers decide they can get by with less space.

Those developments are apt to cause near-term credit issues and long-term adjustments in the CRE business.

Read more...Will coronavirus permanently change CRE lending? via American Banker

Multifamily Remains Long-Term Investment Vehicle via GlobeSt

Not only has COVID-19 upended Americans’ daily routines but also how capital is invested and transactions are conducted in the multifamily industry. While the caution level in the industry is warranted, that same cautiousness must be met with careful optimism based on detailed analysis, hard data and level-headed assessment of the new reality, says Berkadia.

Initial lease renewal rates exceeded 53% in 2019. According to RealPage, renewal rent growth has consistently registered around 4.5% annually for the past few years. Operators can also expect renters to stay put in the meantime as the COVID-19 crisis continues to unfold.

Read more...Multifamily Remains Long-Term Investment Vehicle via GlobeSt

Evictions in Texas are halted, but what happens to renters when the suspension lifts? via Dallas Morning News

The stress that comes with the first day of every month has never been more acute for Dallas Fort-Worth residents forced out of work by the COVID-19 pandemic.

For the week ending March 21, jobless claims in Texas soared more than 860%. And if the swamped phone lines at Texas unemployment offices are any indicator, the state could see those numbers rise even more.

To a degree, local and state officials anticipated this.

Read more...Evictions in Texas are halted, but what happens to renters when the suspension lifts? via Dallas Morning News

Texas Manufacturing Outlook Survey March 2020 via Dallas Fed

Texas factory activity declined sharply in March, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, plummeted from 16.4 to -35.3, suggesting a notable contraction in output since last month.

Other measures of manufacturing activity also point to a sudden decline in March. The new orders index dropped to -41.3, its lowest reading since March 2009 during the Great Recession. Similarly, the growth rate of orders index fell to -44.9. The capacity utilization and shipments indexes fell to -33.4 and -33.8, respectively, also the lowest readings since the Great Recession. Capital expenditures declined sharply, with the index dropping from 6.9 to -34.3.

Read more...Texas Manufacturing Outlook Survey March 2020 via Dallas Fed

At Long Last, the Cycle Ends. What’s Next? via CPExecutive

Commercial real estate’s unusually long run of success over the past decade left many in the industry guessing when and how the cycle would end. Recessions aren’t inevitable, but nobody working in the industry today had ever before gone a decade without having to deal with a major downturn.

All the guessing about the next recession is now over. The fact that nobody had the “global pandemic” box filled in their recession bingo card is of no consequence. The economic effects of COVID-19 have been transmitted to the entire population, even as many states enact social distancing measures to avoid spreading the virus.

Read more...At Long Last, the Cycle Ends. What’s Next? via CPExecutive

Now is the Time to Prepare for the Future of Multifamily via GlobeSt

Many of today’s property managers and leasing agents have been only exposed to strong leasing demand if they entered the industry during the last decade, that is, after the meltdown of 2008 and 2009. But now, that has all changed and they’ve been thrown into the deep end of the pool very abruptly.

Specifically, measuring same-store change on a rolling seven-day average, traffic to multifamily property websites are down 15% year-over-year and guest cards are down nearly 3%. Lead volumes will likely plummet further as more cities adopt shelter in place ordinances, according to a new report from RealPage, provider of software and data analytics to the real estate industry.

Read more...Now is the Time to Prepare for the Future of Multifamily via GlobeSt

COVID-19 Expected to Slow Rental Market for 3 to 6 Months via Multifamily Executive Magazine

The coronavirus, or COVID-19, has “brought a technical end to the 11-year bull market” in equity and bond markets, according to the Yardi Matrix National Multifamily Report for February 2020.

The virus’ spread has disrupted airline traffic, conference schedules, cultural events, and daily activities. Drastic quarantine and social distancing measures, especially in Italy and Wuhan, China, have taken effect to slow the disease’s spread and ease the burden on health care facilities. In addition, as of March 11, Donald Trump has instituted a 30-day ban on travel to the U.S. for all European citizens. As a result, the economy is likely already experiencing a “technical recession,” with the travel, restaurant, and tourist industries expected to take the hardest hit.

Read more...COVID-19 Expected to Slow Rental Market for 3 to 6 Months via Multifamily Executive Magazine

We’re Two Weeks In, What Should Multifamily Firms Do Now? via Multifamily Executive Magazine

As the COVID-19 outbreak continues to rock the nation, the multifamily industry continues to grapple with the new reality while reducing risk and disruption for its residents, employees, and businesses. In a period where it’s anything but business as usual, it’s critical that industry stakeholders arm themselves with guidance and resources that will accurately inform important business decisions.

By now, apartment firms’ senior-level crisis teams should be in the throes of putting their COVID-19 response plan to work and adapting it as needed to the ever-changing circumstances.

Read more...We’re Two Weeks In, What Should Multifamily Firms Do Now? via Multifamily Executive Magazine

Will U.S. Stimulus be Enough to Save the Upcoming Rent Shortfall? via Propmodo

There are two ways to fall off a bike. One way to do it happens suddenly. You are riding along and the next thing you know you are on the ground, left to examine your wounds and wonder what you did wrong. The other way happens seemingly in slow motion. You feel yourself getting off-balance but are powerless to stop your gradual, agonizing descent onto the pavement.

Right now it feels like the economy is doing the latter. The virus came on suddenly but the economic effects are tipping off balance, pushing us slowly off our bike seats. As many people are unable to work, or are out of work entirely, they are wondering the same question: “How do I pay rent?” Even in good times, there were shocking reports that showed that almost three-quarters of American’s are living off of their paychecks, with little or no savings cushion.

Read more...Will U.S. Stimulus be Enough to Save the Upcoming Rent Shortfall? via Propmodo

Rastegar: Multifamily, Self Storage Well Positioned for Current Market Turmoil via GlobeSt

Ari Rastegar, founder of Rastegar Property, has acquired 15 multifamily buildings and previously co-invested in more than 10,000 storage doors across the country. In this exclusive, Rastegar shares the trends he’s noticing, the investor feedback he’s receiving and other topics relevant to two particular real estate sectors.

Rastegar believes multifamily and self storage are desirable in today’s market for a couple of reasons. While the stock market is gyrating, underlying trends still show that the US economy appears strong.

Read more...Rastegar: Multifamily, Self Storage Well Positioned for Current Market Turmoil via GlobeSt

Multifamily Investors Expect Modest Impact from Virus via Multi-Housing News Online

The commercial real estate industry is bracing for disruption brought on by the coronavirus crisis, but a new survey by Institutional Property Advisors (IPA) suggests that the multifamily market may be a safe place to shelter during a time of turbulence.

Nearly two-thirds of respondents to the survey said their firms expected only a slight decrease in multifamily rents over the next six months, while 17 percent foresee a significant drop. Almost 41 percent anticipate that vacancy rates will stay the same or decline.

Read more...Multifamily Investors Expect Modest Impact from Virus via Multi-Housing News Online

Texas Supreme Court halts eviction proceedings through late April due to coronavirus via Fort Worth Star-Telegram

The Texas Supreme Court issued an emergency order Thursday halting all eviction proceedings in Texas through late April.

The order notes that while filings can still be submitted, no trial, hearing, or other eviction proceeding may be conducted until after April 19. The order is effective immediately, and can be extended by the Chief Justice of the Supreme Court.

Read more...Texas Supreme Court halts eviction proceedings through late April due to coronavirus via Fort Worth Star-Telegram

Coronavirus Fallout for North American CRE Firms to Vary via CPExecutive

North America’s highest-rated commercial real estate companies probably won’t have to shutter their doors due to fallout from the coronavirus, but a great percentage will have to brace for setbacks, according to new commentary from DBRS Morningstar. In the commentary, entitled The Impact of the Coronavirus Disease (COVID-19) on REITs and CRE Companies in Canada and the U.S., the credit ratings agency notes that there are many variables at play.

Read more...Coronavirus Fallout for North American CRE Firms to Vary via CPExecutive

What A Recession Could Mean For Multifamily Real Estate Investment In 2020 via Forbes

Multifamily real estate investment, specifically income-generating property, has generally been a stable and high-return asset class. However, amid speculations of an impending recession, you may find yourself asking, "Is multifamily a prudent choice heading into a possible recession in 2020? And, how do I find and maintain profitable investments in currently inflated markets?"

Read more...What A Recession Could Mean For Multifamily Real Estate Investment In 2020 via Forbes

FHFA Moves to Provide Eviction Suspension Relief for Renters in Multifamily Properties via FHFA

Today, to keep renters in multifamily properties in their home and to support multifamily property owners during the coronavirus national emergency, the Federal Housing Finance Agency (FHFA) is announcing that Fannie Mae and Freddie Mac (the Enterprises) will offer multifamily property owners mortgage forbearance with the condition that they suspend all evictions for renters unable to pay rent due to the impact of coronavirus. The eviction suspensions are in place for the entire duration of time that a property owner remains in forbearance. The forbearance is available to all multifamily properties with an Enterprise-backed performing multifamily mortgage negatively affected by the coronavirus national emergency.

Read more...FHFA Moves to Provide Eviction Suspension Relief for Renters in Multifamily Properties via FHFA

NMHC Commits to Support for Residents Impacted by Pandemic via Connect Media

Amid the COVID-19 outbreak, the National Multifamily Housing Council (NMHC) recommends that apartment firms consider adopting the following principles to help America’s renters retain their housing during the crisis:

*Halt evictions for 90 days for those who can show they have been financially impacted by the COVID-19 pandemic.
*Avoid rent increases for 90 days to help residents weather the crisis.
*Create payment plans for residents who are unable to pay their rent because of the outbreak, and waive late fees for those residents.

Read more...NMHC Commits to Support for Residents Impacted by Pandemic via Connect Media

As Unemployment Surges, Where Does Multifamily Stand? via GlobeSt

Unemployment in the US has skyrocketed and there is little expectation that the layoffs will subside in the near term. This week, the Labor Department reported a 30% increase in unemployment claims last week, one of the largest spikes on record. Estimates for future claims are grim, with David Choi, an economist from Goldman Sachs, expecting initial claims for the week ending March 21 to jump to a seasonally adjusted 2.25 million, according to MarketWatch.

Read more...As Unemployment Surges, Where Does Multifamily Stand? via GlobeSt

Dallas-Fort Worth Economic Indicators March 2020 via Dallas Fed

Dallas–Fort Worth economic growth continued in January. Payroll employment expanded, unemployment stayed near record lows, and the Dallas and Fort Worth business-cycle indexes rose further. Homebuilding activity soared in January, and housing market indicators point to moderate price appreciation and stable affordability in fourth quarter 2019.

Read more...Dallas-Fort Worth Economic Indicators March 2020 via Dallas Fed

National Multifamily Report – February 2020 via Multi-Housing News Online

The novel coronavirus has made a significant impact on the real estate industry. However, despite this ongoing outbreak, rents increased 3.2 percent in February on a year-over-year basis, matching the previous month‘s growth rate, according to a Yardi Matrix survey of 127 markets.

Read more...National Multifamily Report – February 2020 via Multi-Housing News Online

In the Short Term, CRE Will Take a Hit. But Real Estate Economists Advise Investors Not to Panic via NREI

As the impact from the measures to stem the spread of COVID-19 takes hold of virtually every sector of the U.S. economy, real estate economists are revisiting their predictions for 2020 made at the beginning of the year.

Just over two months ago, industry economists were saying 2020 activity should largely mirror the level seen in 2019. But with the coronavirus outbreak, those predictions are changing.

Read more...In the Short Term, CRE Will Take a Hit. But Real Estate Economists Advise Investors Not to Panic via NREI

Commercial Real Estate Finding It’s Not Immune to the Coronavirus via CPExecutive

Commercial property executives are trying to maintain calm and complete transactions as efforts to stop the spread of the coronavirus intensify, but a business-as-usual approach is growing increasingly difficult as commerce is being shut down across the country.

Over the last 7 to 10 days, industry has moved between trying to take advantage of a historic drop in interest rates, to cautiously trying to maintain deal flow, to trying to close existing deals, trying to re-trade those deals and then waiting on the sidelines until there is more clarity.

Read more...Commercial Real Estate Finding It’s Not Immune to the Coronavirus via CPExecutive

Coronavirus Fuels Indecision Among Multifamily Investors via NREI

What a difference a week makes. Investors can now expect fewer deals and lower prices for apartment properties—at least in the immediate term—as the U.S. economy adjusts to the rapid spread of the coronavirus disease 2019 (COVID-19).

Read more...Coronavirus Fuels Indecision Among Multifamily Investors via NREI

Why CRE Isn’t Celebrating the Recent Interest Rate Cuts via GlobeSt

The Federal Reserve cut interest rates twice in two weeks in response to the impacts of the COVID-19 outbreak. First, the Fed cut rates to 1% to 1.25% on March 3, and then, in an emergency meeting, made a second cut to 0% to .25% on March 15. Many in the commercial real estate industry say the move was a necessary response to the economic impacts of the virus outbreak, but that they will have little impact on new acquisition commercial real estate deals.

Read more...Why CRE Isn’t Celebrating the Recent Interest Rate Cuts via GlobeSt

Global Uncertainties Add to Multifamily’s Investment Appeal via NREI

Global financial markets are reeling from the drastic steps governments are taking to fight the novel coronavirus COVID-19 pandemic. During the week of March 9, dramatic drops in the Dow Jones Industrial Average signaled the arrival of a bear market for U.S. equities, and European and Asian stocks have also taken a beating.

In the face of uncertainty, individual and institutional investors are taking a closer look at commercial real estate, with a particular interest in the multifamily sector. Unlike office, industrial, retail and hospitality properties that are directly affected by an economic downturn, multifamily tends to be a more stable asset class.

Read more...Global Uncertainties Add to Multifamily’s Investment Appeal via NREI

ALN Monthly Market Stats March 2020 via ALN Apartment Data

ALN Data just released their February 2020 market stats on occupancy and rents for over 80 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene, Corpus Christi and more. It is a must read from a great provider of apartment data.

Read more...ALN Monthly Market Stats March 2020 via ALN Apartment Data

Rising rents: The hottest spots for apartments in Dallas-Fort Worth via WFAA

Trinity Groves/Oak Cliff North and Far South Dallas/Waxahachie, in that order, are the hottest apartment submarkets in North Texas, according to a ranking based on the combination of rental rate growth and absorption.

A submarket that includes downtown Dallas, the West End, and Deep Ellum ranked third, followed by the Denton submarket and the Allen/McKinney submarket, according to the ranking from ApartmentData.com.

Read more...Rising rents: The hottest spots for apartments in Dallas-Fort Worth via WFAA

Top 5 North Dallas Submarkets for Development by Number of Units via Multi-Housing News Online

Dallas-Fort Worth benefits from one of the most robust economies in the country, having remained on an upward trajectory and above national trends throughout the cycle. Growth is supported by the state’s economic environment which has come a long way since its energy-based roots. Although the state still has a substantial oil sector, other sectors have gained strength—education and health services, professional and business services, trade, construction, leisure and hospitality—have all seen remarkable increases. This economic cornucopia has boosted the multifamily sector and will likely continue to do so in the foreseeable future.

Read more...Top 5 North Dallas Submarkets for Development by Number of Units via Multi-Housing News Online

Rate Plunge Prompts Multifamily Borrowing Binge via Multi-Housing News Online

Interest rates have plunged over the last few weeks as the concerns grow about the spread of the coronavirus around the world and the impact on the global economy. The 10-year Treasury rate slipped below 1.0 percent for the first time ever this week, after having been as high as 1.63 percent as recently as Feb. 12. This happened just after the Federal Reserve held an emergency session to cut the interbank lending rate by 50 basis points.

Read more...Rate Plunge Prompts Multifamily Borrowing Binge via Multi-Housing News Online

Rising rents: The hottest apartment submarkets in Dallas-Fort Worth via Dallas Business Journal

Trinity Groves/Oak Cliff North and Far South Dallas/Waxahachie, in that order, are the hottest apartment submarkets in North Texas, according to a ranking based on the combination of rental rate growth and absorption.

A submarket that includes downtown Dallas, the West End and Deep Ellum ranked third, followed by the Denton submarket and the Allen/McKinney submarket, according to the ranking from ApartmentData.com.

Read more...Rising rents: The hottest apartment submarkets in Dallas-Fort Worth via Dallas Business Journal

Why Demographic Trends Support Continued Multifamily Growth via Forbes

As the current economic expansion enters its 11th year — the longest on record — the “when will it end” speculation continues apace. As cap rates hover near historic lows and properties trade for historic highs, the question is particularly relevant for multifamily assets — one of the major beneficiaries of the current expansion.

It’s impossible to know when a correction will occur, so taking a long-term view is a smart approach. My belief is that there are three demographic trends shaping the future of the housing market that support the investment thesis of continued multifamily growth.

Read more...Why Demographic Trends Support Continued Multifamily Growth via Forbes

Texas is missing more than a half-million houses via Dallas Morning News

It’s no secret that home inventories around the country are at their lowest point in decades.

Many metro areas have a shortage of housing.

Texas alone is short more than a half-million houses from what’s needed, according to a report by mortgage giant Freddie Mac. And nationwide, there’s a deficit of more than 3 million homes.

Read more...Texas is missing more than a half-million houses via Dallas Morning News

Eleventh District Beige Book 3/4/2020 via Dallas Fed

The Eleventh District economy expanded moderately over the reporting period. Solid growth continued in nonfinancial services, and expansion in the manufacturing sector picked up to a more moderate pace. Housing demand continued to rise broadly, and sharply higher residential real estate lending boosted overall loan growth. Retail sales growth stalled out over the reporting period, and activity in the energy sector eroded slightly. Employment growth slowed to a modest pace, with a majority of hiring firms noting difficulty finding qualified workers. Upward wage pressures remained elevated. Input prices continued to rise while selling prices were mixed—holding steady in manufacturing but increasing in the service sector. Outlooks generally improved, though the coronavirus introduced new uncertainty into the business environment.

Read more...Eleventh District Beige Book 3/4/2020 via Dallas Fed

Is Multifamily Truly Recession Resistant? via GlobeSt

Multifamily is undoubtedly tremendously popular among investors—and for many reasons. Renter demand is up, and more young people want to live in urban, walkable markets, but the trend has led to a flood of class-A development and repositioning projects, which has taken away affordable housing supply. In a downturn, class-A apartments will be the first to see a dip in demand and rents. However, even with that in mind, multifamily remains the best asset to survive a downturn.

Read more...Is Multifamily Truly Recession Resistant? via GlobeSt

Houston Multifamily Report – Winter 2020 via Multi-Housing News Online

Despite several woes during the first half of this cycle, Houston’s economy is once again on a prolonged upswing. Rent growth is slowly but steadily rebounding again, bolstered by strong employment gains and a solid demographic expansion.

Metro Houston gained 82,800 jobs in the 12 months ending in September 2019, with the professional and business services sector accounting for nearly one-third of the total. Manufacturing and construction rounded out the top three, gaining a collective 25,600 positions.

Read more...Houston Multifamily Report – Winter 2020 via Multi-Housing News Online

Are Texas developers building too many apartments or not enough? via Dallas Morning News

Thousands of people move to North Texas every year, and they all need some place to live.

Most of the newcomers are renting.

“Population growth in the last 10 years has been enormous,” said Jeanette Rice, head of multifamily research for CBRE. “When we talk about growth, multifamily is going to help provide that housing.

Read more...Are Texas developers building too many apartments or not enough? via Dallas Morning News