Real estate – Gatong Cheng Hui http://gatongchenghui.com/ Mon, 21 Nov 2022 18:26:08 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://gatongchenghui.com/wp-content/uploads/2021/04/cropped-icon-32x32.png Real estate – Gatong Cheng Hui http://gatongchenghui.com/ 32 32 13 real estate players competing for the attention of billionaire buyers https://gatongchenghui.com/13-real-estate-players-competing-for-the-attention-of-billionaire-buyers/ Mon, 21 Nov 2022 18:14:55 +0000 https://gatongchenghui.com/13-real-estate-players-competing-for-the-attention-of-billionaire-buyers/
  • The ultra-luxury real estate market is sparkling and exclusive.
  • But posh parties and over-the-top stunts no longer attract the attention of well-heeled shoppers.
  • Here are 13 top advertisers high-end developers rely on to make sure their properties sell for the best price.

The housing market has been brutal for middle-income consumers, but ultra-luxury real estate has never been so bubbly.

The world’s wealthiest are investing their money in real estate, and developers are vying for those millions with projects that only get glitzier, more expensive, and more exclusive. Uncertainty in Europe and Latin America is funneling even more wealth into US real estate in cities like New York, Miami and Los Angeles.

To grab the attention of ultra-rich consumers, developers rely on a small group of PR professionals who specialize in promoting extravagant properties at stratospheric prices.

Insider has identified 13 of the most sought after PR executives in luxury real estate based on research and conversations with industry insiders.

But these pros tell Insider their role has changed since the heady 2010s. Gone are the days of bombastic parties, flashy promotions and upside incentives for shoppers. Digital campaigns have become as important as traditional media coverage. Promotions are now focusing on understated luxury, with wealthy shoppers more interested in “quality and amenities,” said Vanessa Fioravante, co-founder and director of Ander & Co in Miami. “And buyers say, ‘instead of giving me a Lamborghini, just save a few hundred thousand dollars off the asking price.'”

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Expert real estate investment advice in a time of high mortgage rates https://gatongchenghui.com/expert-real-estate-investment-advice-in-a-time-of-high-mortgage-rates/ Sat, 19 Nov 2022 10:30:42 +0000 https://gatongchenghui.com/expert-real-estate-investment-advice-in-a-time-of-high-mortgage-rates/
  • Seasoned real estate investors agree that now is the perfect time to expand your real estate portfolio.
  • There’s less competition right now and it’s a good time to make aggressive offers.
  • Higher mortgage rates make it harder to find bargains, but they’re still there.

Seasoned real estate investors agree that now is a great time to expand your real estate portfolio if you can afford it.

While mortgage rates have continued to deteriorate and exceeded 7% in October, home sales are slowing. Plus, there’s less competition as more Americans aren’t interested (or can’t afford) to buy a home right now: According to an October survey by Fannie Mae, only 16% of consumers think now is a good time to buy a home.

Four established investors told Insider why they’re still buying despite high rates, how their investment strategy has changed, and their tips for navigating today’s market.

Mike Zuber is ‘ecstatic for what’s to come’ and writes ‘aggressive offers’ twice a week

zubers 2

Real estate investor Michael Zuber and his family.

Courtesy of Michael and Olivia Zuber



Michael Zuber believes real estate investors “should be a lot more excited to buy this year than they have been the past two years.”

This is because there is less competition at the moment. With rising mortgage rates and uncertainty about the future of the economy, fewer Americans are looking to become homeowners: According to an October survey by Fannie Mae, only 16% of consumers think the time to buy a house.

That’s great news for Zuber, which has more than 100 units in Fresno, Calif., and is looking to expand its portfolio further. He views home buyers as his “number one competition,” he said. “They have lower down payments and they get better rates, so they’re hard to compete with.”

Right now is the time for investors to make aggressive bids, he pointed out: “I’m always looking for motivated sellers and they’re hard to find. The only time you can find them , that’s when the competition goes away, so I’m excited for what’s to come. I’m ready to write a lot of offers and I’ll close on every good deal.

Currently, he makes about two offers a week. He only writes “attractive offers,” he said, which he defines as anything that will produce a cash return 2-3% above average.

Karina Mejia says potential investors shouldn’t be afraid to buy right now, especially if you’re going to buy and hold

karina mejia

Real estate investor Karina Mejia owns properties in Boston and Georgia.

Courtesy of Karina Mejia



“I really believe it’s still a good time to buy — and I’m not saying that because I’m an agent,” the 25-year-old real estate agent and investor told Insider. She owns homes in Boston, where she lives, and Augusta, Georgia.

“It’s a much better time to buy now than this time last year,” she said. “Now buyers have the ability to do things that they should have done, like inspection contingencies and appraisal contingencies, and they have the ability to get a deal. Now you can actually negotiate and get houses at a discount.”

Whereas, when the market was at its peak, “you couldn’t get your offer accepted if you didn’t go way beyond the requested and waived inspections and assessments.”

As a potential buyer, you need to consider your timeline, she added: Are you looking to stay in your home for the next five to 10 years? Or do you think you will make a move in two to three years?

If you’re looking to buy and potentially sell within three years or less, you’ll probably want to wait to buy, Mejia said: “Values ​​go up and down, up and down, up and down. If you’re going sell within this quick time period, the property might actually be worth less.”

It will be safer to buy if you plan to stay there for a while. Your home will have more time to appreciate in value, which will help offset the expensive transaction costs that come with buying, like your agent’s commission and closing costs.

In general, “I wouldn’t be afraid to buy. I think that’s a mental hurdle that people have to overcome right now,” Mejia said. “If you can still afford a mortgage payment in your current market and buy a home you’d like, then buying makes perfect sense.”

Matt ‘the lumberjack landlord’ braces for rent arrears and market correction

matt owner lumberjack

New Hampshire-based real estate investor Matt “the lumberjack owner” and his family.

Courtesy of Matt and Ashley



A seasoned real estate investor prepares for tough economic times and a potential recession in 2023.

Matt, who goes by “The Lumberjack Landlord” for privacy reasons, has been building his rental portfolio since the early 2000s and currently owns and rents 137 units.

The New Hampshire-based investor expects more unpaid rent and potential evictions as we head into a year that could see unemployment rates as high as 5.5%.

“As unemployment rises, obviously the rent delinquents rise,” he said. He also expects evictions to be “at their highest in three or four years”.

With that in mind, “the most important thing is open communication with your tenants,” he said. “The mistake a lot of tenants and landlords make is that it becomes a contradictory thing. I’d rather a tenant say, ‘Hey, I lost my job. That doesn’t mean I’m going to speed up the process to get them out. It means that I will try to work with them.

It has also been bracing for a correction since earlier this year, when it did a major refinance to free up some cash.

“Now is the time to get as much money out of these assets as possible and then have the cash available if the market corrects aggressively,” he said of his March 2022 refinance. I don’t think it will be a 50% correction because we just don’t have the bad loan structures we had during the Great Recession, but it could be a 10% to 20% price drop.”

Todd Baldwin refuses to pay 6% or more in interest. If it’s a deal he wants, he’ll pay cash.

todd baldwin

Seattle-based real estate investor Todd Baldwin.

Courtesy of Todd Baldwin



“A lot of real estate investors won’t agree with me, but I personally won’t pay more than 6% interest on anything,” Seattle-based investor Todd Baldwin told Insider. in November, asked about the rise in mortgage rates, which exceeded 7% in October. “If the deal is over 6%, I’ll pay cash and hopefully get a discount.”

Baldwin is in the unique situation where he can pay cash if the right deal comes along: in 2021, he brought in more than $1.5 million from property sales, wholesale and rental income , according to documents seen by Insider.

He understands that not everyone can just pay cash if they want to invest now. To help combat high interest rates, consider “house hacking,” he said. That’s how he got his foot in the door in 2015 when he bought his first property.

“If you want to be a landlord but interest rates mean you can’t afford the payment, consider finding a roommate,” he said. If you live with one or more people, you can ask for rent, which will offset your mortgage and potentially allow you to live for free.

“I know having a roommate can suck,” he said. “I did it for five years. But that decision made me a multi-millionaire and now I have the freedom to do whatever I want.”

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Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI) Sees Significant Drop in Short-Term Interest https://gatongchenghui.com/apollo-commercial-real-estate-finance-inc-nyseari-sees-significant-drop-in-short-term-interest/ Wed, 16 Nov 2022 10:10:48 +0000 https://gatongchenghui.com/apollo-commercial-real-estate-finance-inc-nyseari-sees-significant-drop-in-short-term-interest/

Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI – Get Rating) was the target of a sharp drop in short-term interest during October. As of October 31, there was short interest totaling 5,460,000 shares, down 8.4% from the total of 5,960,000 shares as of October 15. Currently, 3.9% of the company’s shares are sold short. Based on an average daily volume of 1,350,000 shares, the short-term interest rate ratio is currently 4.0 days.

Analysts set new price targets

Several stock analysts have recently released reports on ARI shares. Credit Suisse Group lowered its price target on Apollo Commercial Real Estate Finance to $11.00 in a research note Thursday, October 13. StockNews.com began covering Apollo Commercial Real Estate Finance in a research report on Wednesday, October 12. They have set a “holding” rating on the stock. Finally, JPMorgan Chase & Co. cut its price target on Apollo Commercial Real Estate Finance from $11.00 to $9.50 and set an “underweight” rating on the stock in a Monday, October 24 report. .

Apollo Commercial Real Estate Finance Price Performance

NYSE:ARI shares opened at $12.07 on Wednesday. The company’s 50-day moving average is $10.36 and its 200-day moving average is $11.26. The company has a debt ratio of 0.62, a quick ratio of 22.02 and a current ratio of 22.02. Apollo Commercial Real Estate Finance has a fifty-two week low of $7.91 and a fifty-two week high of $14.98. The company has a market capitalization of $1.70 billion, a P/E ratio of 6.42 and a beta of 1.54.

Apollo Commercial Real Estate Finance Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Friday, October 14. Shareholders of record on Friday, September 30 received a dividend of $0.35. The ex-dividend date was Thursday, September 29. This represents an annualized dividend of $1.40 and a dividend yield of 11.60%. Apollo Commercial Real Estate Finance’s payout ratio is currently 74.47%.

Insider buying and selling

In related news, CEO Stuart Rothstein acquired 15,000 shares of the company in a transaction on Monday, November 7. The shares were purchased at an average cost of $11.18 per share, with a total value of $167,700.00. Following the acquisition, the CEO now directly owns 452,676 shares of the company, valued at $5,060,917.68. The acquisition was disclosed in a filing with the SEC, accessible via this hyperlink. 0.73% of the shares are currently held by insiders.

Apollo Commercial Real Estate Finance Institutional Negotiation

Institutional investors and hedge funds have recently changed their stakes in the company. Mercer Global Advisors Inc. ADV increased its position in Apollo Commercial Real Estate Finance by 69.3% during the third quarter. Mercer Global Advisors Inc. ADV now owns 64,084 shares of the real estate investment trust worth $532,000 after acquiring 26,236 additional shares in the last quarter. Vanguard Group Inc. increased its position in shares of Apollo Commercial Real Estate Finance by 1.0% during the third quarter. Vanguard Group Inc. now owns 15,281,156 shares of the real estate investment trust worth $126,833,000 after buying an additional 158,216 shares in the last quarter. Price T Rowe Associates Inc. MD increased its stake in Apollo Commercial Real Estate Finance by 4.1% during the third quarter. Price T Rowe Associates Inc. MD now owns 99,387 shares of the real estate investment trust worth $825,000 after buying 3,881 additional shares in the last quarter. Financial Advocates Investment Management increased its stake in Apollo Commercial Real Estate Finance by 15.4% during the third quarter. Financial Advocates Investment Management now owns 179,921 shares of the real estate investment trust worth $1,493,000 after buying an additional 24,013 shares in the last quarter. Finally, Bank of New York Mellon Corp increased its stake in Apollo Commercial Real Estate Finance by 3.6% during the third quarter. Bank of New York Mellon Corp now owns 1,340,829 shares of the real estate investment trust valued at $11,128,000 after buying 46,836 additional shares in the last quarter. Hedge funds and other institutional investors own 55.57% of the company’s shares.

Apollo Commercial Real Estate Finance Company Profile

(Get an evaluation)

Apollo Commercial Real Estate Finance, Inc. operates as a real estate investment trust (REIT) that originates, acquires, invests in and manages commercial first mortgage loans, subordinate financings and other debt investments related to commercial real estate in the USA. It qualifies as a REIT under the Tax Code.

Read more

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Chinese real estate firm found guilty of bribing former LA board member https://gatongchenghui.com/chinese-real-estate-firm-found-guilty-of-bribing-former-la-board-member/ Sun, 13 Nov 2022 21:35:07 +0000 https://gatongchenghui.com/chinese-real-estate-firm-found-guilty-of-bribing-former-la-board-member/

A Chinese real estate developer has been convicted of spending more than $1 million to bribe a former Los Angeles City Council member to build a skyscraper.

Shen Zhen New World I LLC was found guilty of all counts it was charged with – honest service wire fraud, interstate and overseas travel for the purposes of bribery and corruption, the office of the United States Attorney for the Central District of California.

Wei Huang, owner of Shen Zhen and a Chinese national who has a home in San Marino, California, is also charged in connection with the case, but authorities believe he is a fugitive and is staying in China. .

Shen Zhen purchased the LA Grand Hotel in 2010 and applied to redevelop the site into a 77-story mixed-use skyscraper in 2018.

Prosecutors said that between February 2013 and November 2018, the Chinese company provided Councilman José Huizar and an aide with a variety of gifts in exchange for Mr. Huizar defending and approving the project.

The gifts included cash, casino gambling chips, stays in luxury Las Vegas hotels and casinos, expensive meals, spa and prostitution services, private and commercial flights, political contributions and $600,000 so Mr. Huizar can quietly settle an ongoing sexual harassment lawsuit brought by a former staffer who threatened his career, the Justice Department said.

Mr Huizar was first elected to the city council in 2005, but resigned in 2020 amid the federal corruption probe. The former city councilor pleaded not guilty to corruption charges in late 2020.

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City planners and residents oppose Smithtown Realty Company’s bid to expand the parking lot https://gatongchenghui.com/city-planners-and-residents-oppose-smithtown-realty-companys-bid-to-expand-the-parking-lot/ Sun, 06 Nov 2022 21:46:50 +0000 https://gatongchenghui.com/city-planners-and-residents-oppose-smithtown-realty-companys-bid-to-expand-the-parking-lot/

A Smithtown commercial real estate company’s application to expand its parking lot to a residential area off Route 111 is in jeopardy after city planners recommended against approval.

Zoning Appeals Board administrators have delayed a hearing for the claim until Jan. 24 at the request of an attorney for Island Associates Real Estate, 444 Rte. 111, to give the company time to review its designs.

“We think it’s a meritorious request, but we need to know if we can negotiate a reasonable settlement,” Timothy Mattimore, a lawyer representing a limited liability company linked to Island, told a board meeting. administration on October 25.

His request came after an Oct. 20 advisory report by planner Blaise Donadio concluded that the deviations from city code requested by the company were “substantial and could be detrimental to the community.”

Plans filed with the planning department called for Island to remove a stretch of wood that had for years separated its building from the houses to the west to make way for 66 parking spaces there and elsewhere on its site. The spaces would span 94 feet in a residential area, but be set back 28 feet from the western property line and 33 feet from the southern property line, with a 10-foot planted buffer. The company would need a special exception to city zoning that prohibits the parking of buildings in a residential zone as well as several waivers, including one that would reduce the required buffer zone. The zoning requires a buffer zone equal to the extension of the parking lot in the residential zone, which is 94 feet.

Mattimore did not respond to a request for comment. The island’s general manager, Roger Delisle, did not make himself available for an interview.

City planner Peter Hans told Newsday that planning officials had seen “lots of unused parking spaces” at the site in recent months. In the coming months, he said, members of the zoning appeal board will assess “if there really is this need” for parking and if alternative designs could provide more parking while better respecting city ​​zoning.

In filings, company officials said the expansion was necessary to increase its existing 137 spaces and alleviate a parking shortage that sometimes forces workers or visitors to the building to park on neighborhood streets. “There will be a heavy plant screen added” and “lighting will be diverted from residences,” according to the documents.

But residents questioned the company’s commitments. Island “has set up so many [parking] spots right against our property, with cars idling, people talking, people smoking,” said Paula Klingelhoefer, a semi-retired school administrator who has lived north of the site on Fawn Place for 38 year.

She said she and her husband had spent thousands of dollars on evergreens to mask their property because of the parking lot lights installed by Island and because the plantings the company had installed around its land -” like a little bush” – didn’t provide much of an obstacle.

What was particularly infuriating, she said, was when a contractor on the island demolished a concrete wall around part of the land – at 7am on a recent Sunday morning. “He hasn’t been a good neighbor,” she said.

Another resident, Steve Matteo, who works in publishing and lives on Tanglewood Drive, said the woods to the west of the island building helped block out the almost daily rumble of a generator on the site and helped absorb rainwater that would otherwise flood homes in the area.

He said he wasn’t optimistic about the January hearing. “We feel like we’ve been taken for a ride – they’re not going to change their plans to accommodate us.”

Island Associates Real Estate Plans

Offers: 66 new parking spaces

Existing: 137 parking spaces

Source: Smithtown Planning Department documents

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Compete with companies for residential real estate? | Tonkon Torp LLP https://gatongchenghui.com/compete-with-companies-for-residential-real-estate-tonkon-torp-llp/ Fri, 04 Nov 2022 14:17:32 +0000 https://gatongchenghui.com/compete-with-companies-for-residential-real-estate-tonkon-torp-llp/

Between a booming housing market and rising interest rates, the outlook is bleak for future homeowners in our region. For the most part, however, Oregon buyers have avoided a significant hurdle that has plagued other markets: competition with corporate investors for a limited supply of residential housing.

Will Oregon experience this trend soon?

It is probable. Washington has seen some of this activity and California is a hotbed. The situation recently hit the radar of the Oversight and Investigations Subcommittee, which held a hearing in June titled “Where Have All the Houses Gone? Private Equity, Single Family Rentals and US Neighborhoods.

During the hearing, Rep. Al Green, Democratic chairman of the House Financial Services Subcommittee on Oversight and Investigations, said private equity firms had purchased hundreds of thousands of single-family homes and had put them on the rental market, according to a MarketWatch. report.

The problem is particularly acute in Sun Belt markets. For example, the subcommittee’s memorandum reported, “In Metro Atlanta, 42.8% of homes for sale went to institutional investors in Q3 2021, while investors bought 38.8% of homes in the Phoenix-Glendale-Scottsdale area during the same period. »

Is home ownership off the table for many Americans?

Shad Bogany, a real estate agent and attorney who testified before the subcommittee, said institutional investors are “creating a generation of renters who will be deprived of the benefits of home ownership, the ability to create wealth and stabilize communities,” according to MarketWatch.

Homeowners associations are reporting an increase in crime and dilapidation in communities where business ownership is significant, and some HOAs are pushing back. For example, they institute clauses requiring new owners to live in a home for a specific period of time before they can rent it out, or HOAs cap the number of rentals in a neighborhood. Investors, however, are crying foul, calling the HOAs overreaching restrictions.

In fact, the National Rental Home Council (NRHC), the non-profit trade association representing the single family home rental industry, expressed a different view on the matter in its statement to the subcommittee. The NRHC said the culprit is simply a lack of housing. Freddie Mac estimated the undersupply at nearly 4 million units. There is no doubt that the construction of new housing is essential, but attention must also be paid to corporate investment practices that sharply reduce the supply of housing.

Does Oregon have a chance of avoiding this trend?

Rethinking housing policy in Oregon could help. Corporate investors are snapping up real estate because buying a house usually costs less than building one. If state and local governments work to cut red tape and lower the cost of home construction, it will lead to positive results. Regulations that unnecessarily burden low-income housing development only increase costs and allow investors to raise the prices of existing homes.

And, if there are benefits associated with corporate ownership elements, policymakers should take note. For example, business ownership can lead to maximized use of residential property. Corporate investors have fiduciary obligations that should motivate investors to fully utilize properties and increase supply (ultimately a quadruplex will generate more revenue than a single family home). Fiduciary duties also determine occupancy – a vacant house does not generate income. As this issue grows, policymakers should seek to increase affordability, while looking closely at the impacts of business ownership.

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Steve Jennings to lead AmTrust’s residential real estate practice https://gatongchenghui.com/steve-jennings-to-lead-amtrusts-residential-real-estate-practice/ Tue, 01 Nov 2022 14:47:20 +0000 https://gatongchenghui.com/steve-jennings-to-lead-amtrusts-residential-real-estate-practice/

AmTrust, an international property and casualty insurer, has appointed Steve Jennings as senior vice president, underwriting, to oversee its not-for-profit practice, as well as a new residential real estate practice.

Jennings has extensive experience in residential real estate, human services and other niche businesses. He joins the company after spending more than a decade working at Philadelphia Insurance Companies where his most recent position was as Vice President and Senior Manager, Field Underwriting, Eastern United States.

Previously, Jennings was Senior Vice President at Aon and earlier served as Group Vice President of Commercial Risk Management for Wells Fargo Insurance Services.

He began his career in the insurance industry with Federated Insurance in the greater Atlanta area where, over a 12-year period, he rose to the level of Senior Leader for the Southeastern United States underwriting function. -United.

Commenting on his appointment, Jennings said, “I am especially excited to join an already strong nonprofit practice and take on the new challenge of building a residential real estate practice for AmTrust.

Stratumn, by SIA Partners

“Our parallel goals will be to meet the unique needs of mission-driven organizations and residential property managers while seeking to opportunistically expand our services and add more niche business categories over time.”

Jeff Duncan, Executive Vice President, Commercial Lines, said, “Our new dedicated residential real estate practice will focus on the unique risk management needs of owners and managers of residential properties, ranging from small apartment buildings to national portfolios.

“He brings our existing residential business into a unit that will provide underwriting expertise, customized products and in-depth market knowledge. Our launch of this group, led by Steve Jennings, underscores AmTrust’s long-term commitment to residential real estate professionals and the agents who serve them.

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The ABQ commercial real estate market “everywhere” https://gatongchenghui.com/the-abq-commercial-real-estate-market-everywhere/ Sat, 29 Oct 2022 14:42:24 +0000 https://gatongchenghui.com/the-abq-commercial-real-estate-market-everywhere/
Commercial real estate brokers Tom Franchini, left, and Bill Robertson at a warehouse in Los Lunas. (Adolphe Pierre-Louis/Journal)

When a city grows, where does it go?

With vacancies at an all-time low in the industrial real estate market and growing demand in all real estate markets, it is becoming increasingly difficult to find affordable space around Albuquerque.

Ongoing supply chain issues and labor shortages have contributed to rising costs, reducing new construction – and therefore supply – in commercial, industrial and office real estate.

“The market is really everywhere,” said Steve Lyons, retail broker at SVN/Walt Arnold.

Industrial

The industrial commercial real estate market has been particularly tight, with historically low vacancy rates in the city, as well as across the country. Albuquerque has industrial vacancy rates nearly identical to the national average, but slightly less available space than similarly sized markets.

Industry broker Bill Robertson, senior vice president and director of Colliers International, said he had never seen such low levels.

“Not in my lifetime,” Robertson said. “And I’ve been working in this for 40 years.”

In a context of high demand, low supply and national inflation, prices are rising; a recent report from CBRE revealed that in the third quarter of this year, the median rental price increased by 38%.

Robertson said many people looking for warehouses are desperate enough to find space that they’ll “make do” with what they have. And if Albuquerque doesn’t have that supply, they’ll look elsewhere.

Jim Smith, senior vice president of CBRE, said there has been little new industrial construction in Albuquerque over the past decade.

But that is starting to change.

“There’s probably more speculative building of industrial properties than ever before,” said Smith, who specializes in industrial properties. “There had been a lull for about a dozen years – and that has changed in the last 18 months.”

According to the October CBRE report, there are 528,636 square feet of industrial property under construction, with a speculative 15,715 square foot development under construction in Rio Rancho. However, Smith noted that much of this new build won’t be usable for some time. Supply chain issues have extended construction times, delaying the incoming wave of new properties.

“Everyone is tearing their hair out,” Smith said.

Desk

Albuquerque has a bit more wiggle room in office real estate, with more properties available for rent than Tucson and Colorado Springs. But the number of office spaces available for rent has stagnated in the city for many years.

“There have been very few new offerings in Albuquerque over the past 20 years,” said Walt Arnold, general manager of SVN/Walt Arnold Commercial Brokerage Inc. “I mean, we haven’t built any space considerable office space for quite a while.”

A July Colliers report said there were no new offices being built in the city.

Steve Lyon, CCIM Senior Advisor, left, and Walt Arnold, CCIM, SIOR, who is Managing Director of SVN/Walt Arnold Commercial Brokerage, Inc., pose for a portrait in the boardroom of SVN/Walt Arnold Commercial Brokerage, Inc. (Chancey Bush/Journal)

Arnold said rising costs have reduced the construction of new office space, with more developers choosing to adapt existing properties for office use rather than build new ones.

But even the rehabilitation of buildings and general maintenance have also increased in price.

“Everything: taxes, insurance, janitorial, landscaping, heating, ventilation, air conditioning, all those costs needed to run an office building are going up,” Arnold said. “But the cost of doing that doesn’t go up as much as rents go up.”

Arnold said office rents in Albuquerque have held steady or increased only slightly, despite rising costs for landlords. Competition from other markets has kept rents relatively affordable in the city.

Arnold sees more changes on the horizon as employers assess how they want to use space in a post-pandemic era.

“Having people in the office is what a lot of business leaders think is the right thing to do,” Arnold said. “And a lot of employees feel like they can work from anywhere. So I think those two dynamics will continue to clash over the next few years… As the leases start to expire, I think a lot of people will say, how much space will we need? Do we need what we have? Or can we handle less space? »

Detail

Like offices, the commercial real estate market shows higher vacancies than the industrial market.

But, a nationwide boom in new small businesses has sparked increased demand for smaller retail spaces, SVN/Walt Arnold broker Lyons said.

According to data from the US Census Bureau’s Business Training Statistics, New Mexico saw a nearly 10% increase in the number of business Employer Identification Number applications between August and November. ‘last year.

“It’s not as tight a market as the industrial market, but it’s still very healthy, very strong,” said Ben Perich, vice president of Colliers International in New Mexico. “It’s still a homeowner’s market, more than a renter’s market.”

This demand is not even present in the market; the best spaces — Class A and new construction — are filling up fast, Lyons said. Class A office spaces are generally in prime locations, in good condition, and have more amenities than other office spaces – and charge higher rent.

But, for less desirable properties, there is a “persistent vacancy,” Perich said.

Lyons echoed that sentiment.

“I have properties that are lagging to be rented, and then I have properties that are 100% rented,” Lyons said.

The types of properties renters are looking for are also changing, Lyons said. He has seen increased interest in smaller properties that house a single business rather than large multi-tenant malls.

“You have to turn around and charge them premium rents to justify the construction costs (for multi-tenant properties),” Lyons said.

Likewise, he said rehabilitating old buildings for new uses is more popular in the retail market as it saves some of the cost of new construction.

Between labor shortages and supply chain issues, Perich said he sees problems increasing supply in some areas of the city.

“We have negative headwinds that are going to limit, you know, the ability to add more supply quickly,” Perich said.

The city grows

CBRE’s Smith said many developers and companies are heading to “tertiary” markets like Albuquerque – with Amazon’s move to Albuquerque last year as an example.

“Amazon had an expansion into this market a year ago,” Smith said. “They didn’t need expansion in Los Angeles, Dallas or Seattle because they had already built warehouses in those markets. … They look at places like Albuquerque and say, ‘Well, we don’t have a facility there, so let’s invest in that market.’

This Los Lunas warehouse is one of the properties featured by commercial real estate brokers Tom Franchini and Bill Robertson. (Adolphe Pierre-Louis/Journal)

Between June 2021 and 2022, Bernalillo County collected $51 million more in gross receipts taxes, an increase of about 22%.

“I’m so excited about our economy in the Albuquerque area because it’s growing really well,” Lyons said. “After years of being slow, it’s not flat. And I think that’s great for our city.

Arnold agreed.

“I’m bullish on Albuquerque,” Arnold said. “I still think Albuquerque has a lot of growth ahead of it. I think the forecast for us is good.

Although Robertson said his warehouses have soared, he ultimately said the market might balance out.

“It’s cyclical and it changes,” Robertson said. “There is a rosy ending to the story at some point.”

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Real Estate of Mind: Key UK and US Real Estate Insights for GCC Investors in 2023 | King and Spalding https://gatongchenghui.com/real-estate-of-mind-key-uk-and-us-real-estate-insights-for-gcc-investors-in-2023-king-and-spalding/ Thu, 27 Oct 2022 01:20:04 +0000 https://gatongchenghui.com/real-estate-of-mind-key-uk-and-us-real-estate-insights-for-gcc-investors-in-2023-king-and-spalding/

Following our inaugural Real Estate of Mind roundup (see here) of industry trends earlier this year, as 2022 draws to a close, we’ve hit the road again to connect with clients and friends. to Bahrain, Kuwait, the United Arab Emirates and Saudi Arabia to see what 2023 holds for GCC investors investing in international markets.

The article will focus primarily on the UK, with a section on the US, as we are delighted to have had our US partners on the road with us this time around.

Thank you to our customers and friends for their thoughts and valuable advice. We would welcome further comments.

So here’s our second roundup of Real Estate of Mind…

Insight 1: always identify assets

In the last roundup, we highlighted interest in assets such as logistics, industrial, student accommodation and commercial offices. Appetite remains high in these sectors, but we have seen a new area of ​​interest for GCC investors emerge – the build-to-rent sector. These assets are purpose-built rental communities, designed from the ground up for the rental sector, offering security of tenure to tenants as well as professional management services.

The build-to-rent sector (known as “multifamily” in the United States) is a well-established investment sector for GCC investors investing in the United States. Conversely, historically in the UK ownership of property has been essential. As the cliché goes, an Englishman’s home is his castle. However, as real estate becomes more and more expensive to buy and interest rates rise, the concept of ownership is becoming more and more out of reach for most people and this attitude needs to change. Forget castles; rental housing is the only option available to many. There is also a change in the British mentality in terms of flexibility – whether it means not wanting to be tied to a particular job or place or a particular lifestyle. The combination of these factors has paved the way for a large rental market and the growth of the construction for rental sector.

The build-to-let sector is not a new asset class for the UK market, but it is certainly an asset class of increasing interest to our clients and friends at GCC.

Insight 2: Cash is King

Following the introduction of the actual and proposed tax cuts earlier in September, we saw the pound plummet to its lowest level against the US dollar in over 40 years. Although this has affected the confidence of international investors to some extent, there is no doubt that assets are now much cheaper if purchased in US dollars (or currencies pegged to the US dollar). Therefore, there are opportunities for those with cash that can benefit from the dollar exchange rate.

The exchange rate has depreciated property in the UK considerably, and those with cash are looking for opportunistic acquisitions without obtaining bank financing (mainly because these financing costs are currently very high, currently sitting at 6-7 % all in rate for 5 years fixed term). These investors will then seek to refinance themselves as the financial market in the United Kingdom stabilizes.

Insight 3: The price is right, after adjustments

Over the past few months, the general consensus has been that UK property prices cannot continue to rise at current levels. It is believed that inflation, an increase in financing costs and the prospect of a recession will drive down property prices. We’ve heard estimates that such a price reduction is likely to be between 10-20%. Although this is not yet translating into actual transactions, the market is currently experiencing a 5-10% reduction in prices.

Idea 4: Sustainability

Logistics continues to be a favored sector, but the supply and demand issue means that the returns required for GCC investors are not achievable. We discussed last time the development of these logistics assets. This time we heard about the upgrading of existing logistics assets to, firstly, comply with new UK regulations and, secondly, add capital value at the exit against those assets. This is particularly interesting if the investments required to update the relevant asset are minimal and therefore have no impact on overall returns.

GCC investors are aware and focused on the impending UK regulations and the real need to comply with them in the very near future. This is very much in line with the oft-cited popular data that “80% of the buildings that will be around in 2050 have already been built today“.

Insight 5: Debt funds

As mentioned last time, the creation of debt funds to provide both senior debt (mainly in the UK) and mezzanine debt (mainly in the US) to property borrowers continues to be viewed as a real alternative to direct investments in real estate. The importance of obtaining legal and tax advice to navigate the legal, regulatory and tax framework cannot be stressed enough here.

Insight 6: The United States

Finally, a few observations from our US colleagues noting that the majority of GCC investment continues to go into the US real estate market (in terms of actual deal numbers and volumes).

Inflation pushed the Federal Reserve into action, which dramatically raised interest rates in 2022. The magnitude and speed of the increases created price dislocation in the housing market and increased the cost of borrowing. Therefore, some investors are considering alternative strategies in the short to medium term.

There has been a significant slowdown in trading volume, both due to price uncertainty and changes in capital markets. As mortgage debt has become more expensive, buyers’ underwriting does not support previous valuations based on static income and capitalization rates, and therefore buyers are willing to pay less for the same assets. We are seeing prices drop for some properties and offers being re-traded on price, particularly where the due diligence period has not expired.

In addition, rising interest rates have put pressure on homeowners with imminent debt maturities. These owners plan to refinance with conditions that are often much worse than the current credit facility. For some homeowners, rising interest rates have a negative effect on covenants and interest payments for unhedged variable rate loans. These properties are at risk of being overexploited and under water.

Another chilling effect on transaction volume is that lender underwriting standards have tightened and there are fewer lenders in the market than in the first part of the year. This is a double whammy for the property buyer or owner, as the financing available is not only more expensive, but also more difficult to find.

Depending on how interest rates affect liquidity in the US market, there may be buying opportunities for well-positioned investors.

The Committee on Foreign Investment in the United States (CFIUS) has broad review authority over transactions involving non-US investors in US businesses and assets, including real estate. Notably, in February 2020, CFIUS implemented the final regulations of the Foreign Investment Risk Review Modernization Act of 2018 (FIRMMA), which expressly authorizes it to review controlling and non-controlling foreign investments in real estate. Prior to the enactment of FIRRMA, CFIUS could only review a real estate acquisition if it was part of a transaction likely to result in a foreign investor’s control of a US business. CFIUS jurisdiction continues to be expanded and clarified, most recently through an Executive Order issued on September 15, 2022 by President Joe Biden. The bottom line is that CFIUS exercises substantial authority to define and act on national security risks as it deems necessary or appropriate. When investing in the United States, CFIUS counsel should be consulted to understand the latest applicable rules and regulations.

LAST WORD:

In times of distress, in our experience, the likelihood of disagreements between parties increases, for example between borrowers and lenders and between owners and asset managers. When a business is in trouble, every penny counts and parties will look for every way to save money and increase revenue. Those contracts that were negotiated in good times and put into the draw will now see the light of day. Many precedent-setting court cases have stemmed from a financial crisis, and we expect court cases and litigation in general to increase as we navigate the current economic cycle.

And finally, with the recent appointment of Rushi Sunak as British Prime Minister, all eyes will be on the budget plan due on October 31. Sunak’s first and arguably most important job will be to reassure markets that Britain has a credible economic plan.

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After the frenzy, local experts predict lower property prices https://gatongchenghui.com/after-the-frenzy-local-experts-predict-lower-property-prices/ Sun, 23 Oct 2022 07:04:07 +0000 https://gatongchenghui.com/after-the-frenzy-local-experts-predict-lower-property-prices/


It’s no secret that real estate in the Flathead Valley has been booming for several years, but a change in the market could be coming.

Many factors, including the COVID-19 pandemic, have contributed to urban flight which has seen buyers buy properties without seeing them and pay cash far more than the original listing price. The feeding frenzy has sent home prices skyrocketing, but local estate agents and mortgage brokers believe price drops are on the horizon.

“The median home price in Kalispell is $525,000, which is down from what it was a few months ago when it was in the low six hundred,” says Erica Wirtala, director of public affairs of the Northwest Montana Realtors Association. “I think Whitefish went down a bit, they were at a median house price of over a million. Now they’re around $840,000 – and that’s for one bedroom and two bathrooms – it’s just your average median home.

Home sales data over the past three years paints a dramatic picture of rising housing costs in the Valley. According to Montana Regional MLS, the median selling price of a home in Columbia Falls in June 2020 was $289,000, which peaked in May 2022 at $751,000.

In Kalispell, their median sale price was $315,000 in June 2020. Kalispell reached record prices in June of this year at $650,000.

In resorts like Bigfork and Whitefish, the price increase is more significant. In June 2020, Bigfork’s median home sold for $363,000, that price nearly tripled to its peak in April of this year at around $1.1 million. In Whitefish, the median price was $425,000 in June 2020 and peaked in August this year at just over $1 million.

Those high prices have started to come down from their peak – now most places sit with a median home sale price between $500,000 and $800,000.

SLOWDOWN The decline has real estate agents speculating that high house prices in the valley are now down, but that hasn’t stopped many sellers from trying to participate in the gold rush.

Real estate broker David Fetveit said he will ask sellers what they would like to list their home for, warning them they should be prepared to cut prices.

“We’re going to start where the prizes were, you know, what your stretch prize would be. But I always tell them in advance to be ready to make price reductions. If we don’t get offers within the first 30-45 days, we need to start lowering the price and trying to figure out where the price is, where the market is for that property,” Fetveit said.

But the price cuts open the door to more typical homebuyers – someone looking for a 30-year mortgage. David Boye, a Black Diamond Mortgage broker in Whitefish, said people who had trouble getting a loan might have a better chance of finding someone to work with them.

“If you had credit issues, you might not have been able to find a loan officer willing to help you get a loan in 2021,” he said. “Everyone is busy with easy money, so they’re not that motivated to work with someone who needs more time.”

But as the market evolves, it can be beneficial for future homeowners who have had a harder time getting a loan.

“Obviously everything is probably a little worse (than before the boom) but the desire to work together is there for me to work with them and the desire for them to put in the work,” Boye said.

This job means saving for a down payment and maintaining good credit for those wishing to buy property – being prepared at all times, because even if the market is cooling, it is still quite warm.

TIME of the year in which sales take place has also changed.

It used to be that winter meant a time of respite for the Flathead Valley real estate market, Fetveit said, but in recent years he and other realtors have kept busy regardless of the season.

“Back when we had normal market cycles, things slowed down in the winter. Mainly because a lot of them, the second and third home market – those people just wouldn’t be here for winter shopping. But all bets were off in 2020 and 2021, there was no difference between seasonality. If there was one on the market, people would buy it,” Fetveit said.

Professionals predict that other factors like supply and demand and high interest rates will do more to affect the market here.

The Federal Reserve decided to raise interest rates this summer in an effort to reduce high inflation. Currently, the interest rate on a 30-year fixed rate mortgage is just over 7%.

Boye said it didn’t have as much of an impact on people who were looking to buy a home but couldn’t when the market was most competitive.

“People who have not been able to access the property are concentrated. So people with credit problems or for some reason in their life they couldn’t qualify for the loan, they are ready to accept the higher interest rates or the higher prices because they want get a house,” Boye said.

Experts are urging first-time home buyers to be patient and prepare for the perfect time to make an offer.

PLAN A A 15% to 20% drop in house prices in the Valley, Boye still does not expect a real estate crash like in 2008.

He said that when it comes to this market crash, supply and demand played a much bigger role.

“If you go back to 2008, we had massive supply and few buyers. So we oversupplied the housing economy and then it crashed. In this case, you have a lot of people who want to become homeowners and they’ll literally go house hunting and there’s nothing available,” Boye said.

He said the Valley in particular has a supply and demand problem for single-family housing. He said that in the 26 years he has lived here, the biggest challenge he has faced in getting proper inventory is the time it takes for a developer to go from thinking about creating housing to the placing on the market. He said he hadn’t seen a serious attempt by communities to set aside certain areas to become high-density housing.

“The problem is always that no one wants high density development in their backyard. But high-density development is always the solution because it solves the supply problem, right? But you have to pick a few places in your community and say, “We need to put high-density housing in certain areas,” and the harder it is for a developer to get that, the longer it takes, and the longer it takes more of the problem it is. So it’s always too late – whenever we have a high demand for housing, we don’t have enough housing,” Boye said.

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