Archive for the ‘Multi Family’ Category

Led by Multi-Family, CRE Saw More Deals than Expected in Q1

Friday, May 17th, 2013

Commercial real estate performed better than expected in the first quarter of 2013, with excess of $63 billion in transactions taking place nationwide. According to GlobeSt.com, due to anticipated tax increases, there was an eagerness on behalf of sellers to get deals closed at the end of last year, so a lot of volume activity that had been expected for January was pulled to December. This led to the low expectations for the first quarter, but as it turns out, transaction activity remained strong.

To go along with the impressive numbers thus far, experts predict an even stronger second half of 2013. This charge will continue to be led by multi-family, as the sector remains red hot by accounting for $35 billion of the total first quarter sales. Several large multi-family portfolio sales occurred in February, and shallow development in years past should keep the market tight with mid-to-low vacancy rates across core markets.

To read the full article from GlobeSt.com, click here.

Posted in Economy, Multi Family, Real Property | No Comments »

Overbuilding and Value the Top Concerns in Student Housing

Wednesday, May 15th, 2013

The reoccurring themes at the RealShare Student Housing conference this week in Irving, Texas were concerns about overbuilding and the search for perceived value in the segment. According to GlobeSt.com, panelists at the event were in agreement that students and parents alike are continuing to seek out the best value. This means the properties with higher rents are not going to be as popular as they once were, as the market is wary of adding additional costs on top of tuition.

In terms of overbuilding, even though the sector’s performance remains strong, too much product is being built to go along with the demand at the moment. Presently, while things may seem alright, oversupply isn’t something that’s incremental – rather, it seems to all come online at once. This has led the panelists to predict some future pain in that aspect.

To read the full article from GlobeSt.com, click here.

Posted in Economy, Multi Family, Real Property, Student Housing | No Comments »

Tucson All-In on Downtown Business Incentives

Friday, May 10th, 2013

Tucson, Arizona City Council has voted in favor of an incentive that when finished will waive property taxes for a multi-million dollar downtown development. According to Inside Tucson Business, the deal, a Government Property Lease Excise Tax Incentive, would exempt the developer of the 196-unit downtown student housing development The Cadence from paying property taxes for eight years. Costs of the development are estimated to be around $34 million.

The backbone of the agreement will give the city ownership of the properties during the eight years in which it will be exempt from property taxes. The ownership would be strictly for tax purposes, where the management and care of the property would still be the responsibility of the developer. The short-term benefits for the city should come in the form of new jobs and a spike in sales tax due to retail activity, and the long term should bring increased value in the properties that would provide greater property tax revenue in the future.

To read the full article from Inside Tucson Business, click here.

Posted in Construction, Economy, Multi Family, Real Property, Student Housing, Western | No Comments »

Demographic Trends Lead Investor Interest to Alternative Assets

Thursday, April 4th, 2013

Due to lack of confidence in the future performance of traditional commercial real estate property types, many investors are beginning to set aside capital for alternative assets. According to the National Real Estate Investor, such assets, including student housing, seniors housing and medical office buildings, among others, have broad demographic trends supporting their success, proved immune to the recession and offer higher yields than comparable properties in other sectors.

The current market demand for alternative assets is being driven by demographics. The 78 million baby boomers nearing retirement and 80 million echo boomers entering their college years are creating a significant need for more senior housing, medical office and student housing space. In addition to the high demand, many of these special purpose properties can be purchased at very attractive cap rates at the moment as they all seem to carry less liquidity due to their early stages of development and smaller pool of investors.

To read the full article from the National Real Estate Investor, click here.

Posted in Economy, Medical, Multi Family, Office, Real Property, Senior Living, Student Housing | No Comments »

Senior Housing Developers Using Caution

Tuesday, March 19th, 2013

Despite the overwhelming demand for senior housing space, development continues to lack, and is commonly blamed on tight financing. However, according to the National Real Estate Investor, the lack of bank support may be a myth, experts say, as established firms are more likely just building carefully and focusing on need-based uses rather than market-rate properties. As it stands, construction starts for senior housing represent 1.4% of inventory, one-third less than the level right before the recession.

As developers remain picky in an industry that is still riddled with mystery, it is becoming more and more evident that the senior living pipeline is one that will be built gradually, with the most needed housing being snapped up as soon as it is opened. Still, despite what is being reported, financing is not difficult to come by for senior housing development for those firms that have experience in the industry.

To read the full article from the National Real Estate Investor, click here.

Posted in Construction, Economy, Multi Family, Real Property, Senior Living | No Comments »

Medical Office Landscape Constantly Garnering Interest

Tuesday, March 5th, 2013

Due to its traditionally lower vacancies and higher rents, the medical office market has generated investors’ interest over the past decade like never before. According to GlobeSt.com, medical and dental tenants tend to be stable, credit worthy, and move less frequently than office tenants due to patient referral patterns and long-term patient relationships which are carefully developed over time. In fact, the vacancy rate among medical office buildings nationwide is generally half that of regular office buildings at about 5-7%.

The recent trend of tenants seeking space outside of the congested hospital vicinity to more free-standing medical office locations has led to many investors and developers increasingly identifying existing, underutilized office or retail properties for conversion to medical office buildings at a lower cost and quicker turnaround to market. The demand for such space is as strong as that of on-campus space, and everything is pointing to low vacancies and high rents in both areas for the future.

To read the full article from GlobeSt.com, click here.

Posted in Economy, Health Care, Medical, Office, Real Property | No Comments »

San Jose High-Rise Incentives Extended after Early Success

Thursday, February 28th, 2013

The deadline for San Jose, California high-rise developers to obtain a certificate of occupancy in order to qualify for an incentive program that will cut fees has been extended to August 31, 2016. According to the Silicon Valley Business Journal, in addition to cutting construction taxes for qualified San Jose high-rise projects in half, the incentives reduce park fees, eliminate requirements for fire-control systems and guarantee that application review will take less than 120 days.

The original purpose of the incentives was to spur high-rise development. The results to date have been so positive that the deadline was extended almost three full years. One specific project has reaped direct benefits of reducing their construction taxes from $1.56 million to $735,000 with the incentives. Several other examples are being realized across the city, and these cases are expected to generate more interest in development.

To read the full article from the Silicon Valley Business Journal, click here.

Posted in Construction, Economy, Multi Family, Office, Real Property, Western | No Comments »

All Commercial Real Estate Sectors Now Slowly Recovering

Monday, February 25th, 2013

Gradual economic improvement and job creation are allowing all sectors of commercial real estate to slowly recover after being hit hard by the recession. According to the National Association of Realtors’ Commercial Real Estate Outlook, the bright spot in the industry continues to be multi-family as pricing for the ten markets in the prime multi-family index have regained pre-recession peak levels due to the high investor interest in the sector.

Outside of multi-family, office, industrial and retail all project a decline in vacancy rates from now until this time next year. Additionally, all are also expecting increases in rents over the same time-frame. The economy as a whole still will remain the deciding factor in whether or not this progression continues. The overall economy is expected to grow 2.5% in 2013, and with modest job creation and assuming there is no fiscal cliff; the demand for commercial space should gradually rise.

To read the full article from AGBeat, click here.

Posted in Economy, Industrial, Multi Family, Office, Real Property, Retail | No Comments »

Upcoming Activity by Several Taxing Jurisdictions in the Southeast

Thursday, February 14th, 2013

A variety of taxing jurisdictions in Georgia, Tennessee and North Carolina have recently announced upcoming activity relevant to values in their respective counties.

The Georgia counties of Fulton, DeKalb and Cobb have indicated recently that they will be increasing assessments on Class A multi-family assets for 2013. Fulton has further indicated that they will be going after Class B multi-family as well. Additionally, Gwinnett County will be targeting increases for large office buildings, high-rise hotels, restaurants, shopping centers with a grocery store anchor, mini-warehouses and some larger warehouses, and any commercial property that recently sold.

In Tennessee, Shelby County has released their capitalization rates for the 2013 revaluation. They will be providing this information to large commercial owners in the next two weeks with notices set to be issued by mid-March. Paradigm has been advised that they will go after increases in Class A apartments, some grocery anchored retail, and selected industrial space over 450,000 square feet. Rutherford County will be targeting office, select retail, and some multifamily, but their revaluation will not occur until 2014. Finally, Davidson County has mentioned a desire to go after office and multi-family, but it will be bracketed by submarket. They may go after additional assets, but they have not yet completed their reviews.

In North Carolina, the listing deadline for Forsyth County has been extended to February 15^th. During their recent reappraisal information sessions, the county laid out the schedule of standards and values to be utilized during this year’s reappraisal. The notices are due to be issued next week and the appeal forms will be included with the notice. Additionally, the county is expected to raise the tax rate by 6.3 cents per $100 due to a projected 8.6% drop in revenues from this year’s reappraisal. This drop is anticipated due to an expected reduction in values for several property types.

For more information on any of these developments, contact Cameron Moore of Paradigm’s Atlanta office at (678) 954-6002 or cmoore@paradigmtax.com.

Posted in Apartments, Eastern, Economy, Hospitality, Hotels, Industrial, Multi Family, Office, Paradigm Info, Real Property, Retail, Strip Centers | No Comments »

Characteristics of the Nation’s Top Multi-Family Markets

Wednesday, February 13th, 2013

The traditional factors that may point out a good apartment investment can sometimes lead even the most diligent investors down the wrong path. Such fundamentals as single-digit vacancy rates and double-digit rental rate growth may lead to good investments today, but can end up lacking when it comes to future growth. In addition, if you simply invest in only the historically well-performing coastal markets, you end up in competition with every other investor while paying cap rates below 4% on assets with little to no upside.

The National Real Estate Investor has identified the five characteristics that define the nation’s top mufti-family markets, like Dallas, Seattle, Raleigh, Denver, and Washington DC:

Strong population growth
Young, mobile residents
Expanding employment base
Tight submarkets
Educational attainment/educated workers

To read the full article from the National Real Estate Investor detailing each characteristic, click here.

Posted in Apartments, Economy, Multi Family, Real Property | No Comments »

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