Posted tagged ‘Commercial Real Estate’

NAR Projects Slight Increase for Apartment Vacancies; Rents to Rise

August 28, 2013


This is good news for the Real Estate industry. As rent rates rise more and more people will determine that buying a home makes a lot more sense that renting. This will increase sales prospects. Please read the article below and let me know what you think.

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Vacancy rates in commercial real estate (CRE) markets are projected to continue declining at a moderate pace as rent grows modestly, according to the latest quarterly forecast from the National Association of Realtors (NAR).

Nationally, NAR forecasts slight drops in vacancy rates across the office, retail, and industrial markets over the next year. Multifamily vacancies are expected to edge up very slightly, on the other hand.

In the office sector, vacancy rates are anticipated to decline from a projected 15.7 percent in Q3 2013 to 15.5 percent in Q3 2014. At the same time, office rents should increase 2.5 percent over 2013 and 2.8 percent in 2014,NAR said. Net absorption of office space is estimated to be 30.1 million square feet this year and 41.6 million square feet in 2014.

On the industrial side, vacancy rates “are likely to fall from 9.3 percent in the third quarter of this year to 8.7 percent in the third quarter of 2014.”

Annual industrial rents are expected to rise 2.4 percent in 2013 and 2.6 percent in 2014, while absorption of industrial space is anticipated at 102.0 million square feet this year and 105.8 million square feet next year.

“Office vacancies haven’t declined much because total jobs today are still below that of the pre-recession level in 2007, but rising international trade is boosting demand for warehouse space,” said NAR chief economist Lawrence Yun.

In retail markets, vacancy rates are forecast to decline from 10.6 percent in the third quarter of 2013 to 10.0 percent in the third quarter of next year; average retail rents are forecast to increase 1.5 percent this year and 2.3 percent next year, with net absorption coming in at 11.8 million square feet and 18.2 million square feet, respectively.

To see the complete article – please use the link below.

Rents to Rise

Commercial and Multifamily Originations Post Increases in Q2

August 1, 2013


This is good news for the recovery of the housing market as the commercial and multifamily are usually the last to come back. Please read the article below and let me know what you think.

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Commercial and multifamily loan originations are up both quarterly and over the year, according to the Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations released Tuesday by the Mortgage Bankers Association (MBA).

Originations increased by 36 percent from the first quarter to the second quarter, with the greatest increase in activity occurring among hotel properties, which experienced an 89 percent increase over the quarter.

A significant increase in originations also took place among office properties in the second quarter, when originations spiked 75 percent from the previous quarter.

Retail property originations were up 48 percent; industrial property originations were up 44 percent; and multifamily properties were up 22 percent over the quarter.

Despite a “slower start to the year, lending by life insurance companies surged in the second quarter to the highest quarterly volume on record for that sector,” said Jamie Woodwell, MBA’s VP of commercial real estate research. Life insurance companies upped their commercial/multifamily investment by 100 percent in dollar volume over the quarter.

When comparing the first half of the year to the first half of last year, MBA calculated an 8 percent increase in commercial/multifamily originations this year.

“The apartment market continues to be the belle of the ball, with multifamily mortgage originations running 31 percent ahead of last year’s first half total,” Woodwell said.

Hotel property originations are up 13 percent when comparing the first six months of this year with the first six months of last year, and industrial property originations are up 1 percent.

On the other hand, office, retail, and health care property originations are all down, by 2 percent, 19 percent, and 27 percent, respectively, according to MBA.

To read the complete article – please use the link below.

Commercial and Multifamily Originations

Income, Transactions Improve for Commercial Realtors

May 27, 2013


The Commercial market improving is a very good sign. Please read the article below and let me know what you think.

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The National Association of Realtors (NAR) reported members who practice commercial real estate saw median income rise to the highest level since 2008, reflecting progress in the commercial sector.

In 2012, commercial Realtors reported a median annual income of $90,200 in 2012, up from $86,000 in 2011, according to NAR’s 2012 Commercial Member Profile.

Among NAR members in commercial real estate, brokers and appraisers brought in the highest income last year, and sales agents reported the lowest. Most members—60 percent—were brokers, while 25 percent were sales agents.

“The commercial market is showing signs of improvement, which is reflected in the positive trends in income, transactions and sales volume reported by our Realtor commercial members,” said Gary Thomas, NAR’s president. “This is a hopeful sign for the future.”

Median sales volume for commercial members increased to $2,507,700, with a median of eight transactions last year, the NAR reported. The median value of sales transactions stood at $433,600, and the median square footage was 10,400.

To read the complete article please use the link below.

Transactions Improve

NAR Speculates on Future of Housing at Realtor Expo

May 20, 2013


NAR seems to go along with every other forecast I have read this year but that is not a bad thing by any means. Please read the article below and let me know what you think.

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The National Association of Realtors (NAR) offered up its predictions on housing as the market deals with the effects of low inventory.

At the Realtors Midyear Legislative Meetings & Trade Expo, NAR’s chief economist Lawrence Yun projected further increases in existing-home sales.

According to a release, Yun expects existing-home sales to increase to nearly 5 million this year, then grow to an annual rate of 5.3 million sales in 2014, and rise up to 5.7 million in 2015.

Dramatic price increases are also expected to continue this year.

“Double digit price gains are within reach in 2013 because inventory is bouncing near 13-year lows, but some relief to inventory will occur later in the year,” Yun said.

NAR projects the median existing-home price will increase to about 8 percent this year from 6.4 percent in 2012, and then slow to 5 percent in 2014.

Yun also estimates 51 percent of renters are financially qualified to purchase a home. This is a drastic increase from 24 percent in 2005. Yun’s calculation, however, left out credit scores since they were unknown.

“Just looking at the financial qualifications, this means there about 8 million more renters with the income necessary to buy a home now than in 2000, but they are choosing not to, or are unable to become a home owner,” he said.

If credit standards ease up a bit and return to what NAR calls “normal,” the association predicts even further gains in home sales of 15 to 20 percent.

Normal, according to the NAR, is about 720 for conventional loans and 660 for FHA loans.

To read the complete article please use the link below.

Future of Housing

CMBS Delinquencies Down for 9th Straight Month

March 11, 2013


The loan modification program(s) have helped individual home owners. Do you think that it was worth the money that that they costs the public at large?  Please read the article below and let me know what you think.

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U.S. CMBS delinquencies spiraled down for the ninth straight month in February, Fitch Ratings reported Friday.

Two large loan modifications helped bring down the CMBS delinquency rate, which fell 30 basis points (bps) to 7.61 percent, down from 7.91 percent in January, according to the rating agency’s index. The dollar balance of delinquent loans also sank below the $30 billion mark, a first since February 2010, Fitch stated.

Fitch reported two high-profile loans are being modified and were removed from the index. The loans were the $195.1 million Babcock & Brown FX 3 portfolio and the $190 million One Congress Street.

“With many loans over $100 million still in the index, steep month-over-month declines in CMBS delinquencies are likely to continue as larger loans get resolved,” said Mary MacNeill, managing director at Fitch.

In addition, February was the largest month for new CMBS issuances in over five years, which also helped bring down the delinquency rate.

Resolutions, which reached $2 billion, outpaced the $1.1 billion in additions in February.

With the exception of industrial, all commercial sectors saw a month-over-month drop in delinquencies.

To read the complete article please use the link below.

Delinquencies Down

Q4 GDP Falls for First Time Since Recession Ended

February 2, 2013


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Battered by storms and droughts, real gross domestic product (GDP) fell 0.1 percent in the fourth quarter, the Bureau of Economic Analysis reported Wednesday. The decrease marks the first “negative growth” since the end of the Great Recession in mid-2009. Economists had expected a weak 1.0 percent growth compared with the 3.1 percent annualized growth rate in the third quarter.

For the full year, GDP rose 2.2 percent compared with an increase of 1.8 percent in 2011.

BEA, in reporting GDP—the broadest measure of the nation’s economy—“emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency.”

The GDP downturn does not automatically signal a return to recession, which is loosely defined as two consecutive quarters of negative growth. That said, in the six quarter recession, which began at the tail end of 2007, GDP fell in Q1 2008, but rose in the second before remaining negative for the next four quarters.

The first revision of Q4 data will be reported at the end of February.

The biggest hits to fourth quarter GDP came from a sharp drop in government spending, which fell 6.6 percent from the third quarter, primarily federal government spending, which dropped 15.0 percent quarter-to-quarter. Private investment fell 0.6 percent, primarily inventory investments and a fall-off in exports. Imports, which in GDP accounting are a subtraction from GDP, also fell, but not enough to offset the drop in exports.

Personal consumption expenditures—the largest component of GDP—grew 2.2 percent in the fourth quarter, faster than the 1.6 percent growth in the third. Non-residential fixed investment grew based on stronger investment in equipment; spending on non-resident structures fell 1.1 percent in the fourth quarter.

Residential fixed investment improved 15.3 percent in the fourth quarter, the strongest growth since the first quarter.

By the numbers, GDP fell $4.9 billion in the fourth quarter to $13.65 trillion. Personal consumption grew $51.8 billion and accounted for 70.9 percent of total GDP, up slightly from 70.5 percent in the third quarter.

To read the complete article please use the link below.

GDP Falls

Beige Book Sees Economy Expanding

January 18, 2013


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Economic activity “expanded” in the closing weeks of 2012, the Federal Reserve said in its periodic Beige Book released Wednesday, reflecting a slow but steadily declining unemployment rate and low rates of inflation—conditions the Fed said would have to be met before it raises interest rates.

“Since the previous Beige Book [November 28, 2012], activity in the New York and Philadelphia Districts rebounded from the immediate impacts of Hurricane Sandy,” the report said. “Growth in the Boston, Richmond, and Atlanta Districts appears to have increased slightly, while the St. Louis District reports some slowing.”

And, according to the Beige Book, districts reported stronger consumer spending—about 70 percent of the nation’s GDP—with holiday sales “modestly higher” than in 2011. At the same time, the report said business contacts were “citing concerns that consumers will spend cautiously due to ongoing fiscal uncertainty.”

According to the report, “real estate activity has expanded or held steady in 11 Districts for existing home sales and leasing; eight Districts for residential construction; 11 Districts for nonresidential sales and leasing; and nine Districts for nonresidential construction.”

Overall loan demand, the Beige Book said, “was steady in five Districts, rose in four, and fell in one.” At the same time, “credit standards were largely unchanged, except in two Districts where there were some signs of loosening” and six Districts reported improving credit quality and/or falling delinquency rates.”

The anecdotal Beige Book is issued by the Fed eight times a year, about two weeks before a meeting of the Federal Reserve’s policy-setting Board of Governors. The FOMC is next scheduled to meet January 29-30. Though a closely watched release, it is rarely, if ever, cited in the minutes of the meets of Board of Governors.

The Beige Book said, “residential real estate activity expanded in all Districts that reported” and “growth rates were described as moderate or strong in nine Districts.”

The report said contacts in Boston “attributed their strong sales growth to low interest rates, affordable prices, and rising rents.” The five Districts that reported on housing inventories, the report said, “all reported falling levels” and “new residential construction (including repairs) expanded in all but one District of those Districts that reported.”

To read the complete article please use the link below.

Economy Expanding