Multifamily Market Draws Optimism From Freddie Mac

Multifamily Market Draws Optimism From Freddie Mac

February 2016

The year 2015 is one that multifamily investors will remember fondly.Multifamily

Higher-than-expected demand helped absorb most of the rental supply, keeping vacancy rates low. Meanwhile, rent continued to rise in many markets. Experts are split as to what investors should expect from multifamily in 2016. But Freddie Mac struck a cautiously optimistic tone in its newest Multifamily Outlook 2016 report.

Freddie Mac based its outlook on continued economic growth and the following key drivers:

  • Strength in the job market
  • Reduced affordability of owning a home

So, more people have jobs, and fewer people can afford to own homes. That makes renting an attractive option, especially in metropolitan markets.

Multifamily

Freddie Mac is cautiously optimistic about the multifamily market.

Freddie Mac does expect growth rates to moderate in 2016, but not as much as the more dire projections indicate. Relatively low vacancy rates in most markets will contribute to rent growth in the year ahead.

You might ask why Freddie Mac is being cautious. Well, it admits that turmoil in the financial markets is a cause for some concern. Still, it’s not nearly enough for Freddie Mac to be scared of the multifamily market anytime soon.

Read more about Freddie Mac’s multifamily outlook from Multi-Housing News.

Ryan Companies Closes on Land in Prime Chicago Suburb

Ryan Companies Closes on Land in Prime Chicago Suburb

February 2016

Ryan Companies

The office market in Oak Brook is in high demand.

Ryan Companies is making a splash in a highly valued suburban Chicago office market.

GlobeSt.com has all the details of the Minneapolis-based CRE firm’s purchase of 11 acres at the I-88/I-294 interchange in Oak Brook. Plans call for a combined office and medical campus complete with structured parking.

As Tim Hennelly, president of Ryan’s Great Lakes region, told GlobeSt., “This acquisition continues our strategic approach for Ryan to be a leader in delivering complex, signature developments in proven markets and asset classes throughout the Chicago metropolitan area.”

Location is a key part of the transaction, which proves there are still strong suburban markets capable of attracting development. Vacancy rates for class A properties in Oak Brook are low (per NAI Hiffman’s year-end office market report), making the type of office space Ryan plans to develop extremely attractive.

Midwest Update: 18-Hour Cities and Top CRE News

Midwest Update: 18-Hour Cities and Top CRE News

February 2016

From continued optimism regarding 18-hour cities to an app that bills itself as real estate’s answer to online dating, here’s a quick look at some of the top CRE news from this week:

Top CRE news

Photo via NREI Online.

  • Suburban Pricing on the Rise — Want to invest in the downtown area of a top suburb? You’re probably going to pay for it. Investors are paying higher-than-average prices for the best suburban properties, recognizing that proximity to jobs, amenities and transit make them attractive options. Millennials and older baby boomers are responsible for driving the trend. (NREI Online)
  • Investment Outlook — Is there such a thing as too much buying in the world of commercial real estate? At least one expert asked himself that question after reviewing the Colliers International Global Real Estate Outlook report, which found that more than half of the 600 investors it surveyed plan to increase their allocation to real estate in 2016. (Real Money)
  • Listing Option for Small Tenants — If you’re a small tenant who has wished finding office spaces was as easy as ordering a cab or setting up an online date, meet Crelow, a Minneapolis-based tech app. CEO and co-founder Jim Simpson described Crelow as “an eHarmony or Uber or Priceline.com for office space.” There are no listings on Crelow. Instead, the tenant lists information about itself and hopes to make a great impression to attract landlords. (San Jose Mercury News)
Ship-to-Store Strategy Gains Popularity Among Retailers

Ship-to-Store Strategy Gains Popularity Among Retailers

ship-to-store

February 2016

Buy it online. Pick it up in the store. This new twist on e-commerce is taking hold with many retailers, but is it working? A new report from Retails Systems Research/SPS Commerce reveals that a growing number of retailers — including giants like Walmart, Lowes, Home Depot and Target — are offering customers a buy online, pickup in the store service.

According to the report — reviewed by Bisnow here — 61 percent of retailers offered a ship-to-store option as of September of 2015. That’s an even larger majority than the 53 percent of retailers who offer a 2-day delivery fulfillment option.

For retailers, the benefit of this strategy is twofold. The shipping fees for delivery of online purchases can be enormous, even for high-volume retailers. A ship-to-store option can bring those expenses down. It also gets customers in the door of a brick-and-mortar store, where they are more likely to make impulse buys.

Consumers appear to be warming up to the idea. A survey by UPS found that 38 percent of shoppers will now choose a ship-to-store option. That’s an uptick of 3 percent from 2014, with the potential to grow even more in the years ahead.

The Dangers of Ship-to-Store

Ship-to-storeThe Ship-to-store strategy is not foolproof, however.

Just last year, a JDA Software Group Inc. survey of more than 1,000 U.S.-based online shoppers revealed some troubling numbers. Of the 35 percent who opted for a ship-to-store option in the previous year, 50 percent reported having problems retrieving their purchases.

This approach only works if it is convenient enough that it doesn’t drive customers away. The ship-to-store strategy can be an excellent tool, but only if the stores are staffed to handle the additional volume.

The Top Commercials From the Super Bowl

The Top Commercials From the Super Bowl

No disrespect to Peyton Manning and the champion Denver Broncos, but everyone knows the commercials are the star of Super Bowl Sunday. There was a lot of variety, with Amazon making its Super Bowl debut, Mountain Dew causing a stir online and a series of real estate commercials.

These commercials represent a significant financial investment — it’s been reported that CBS set its base rate for 30-second advertisement at $5 million — so we rounded up the best of the bunch. What’s your favorite?

Amazon

Amazon produced one of the most talked-about commercials of the night, packing in the star power with Alec Baldwin, Dan Marino, Missy Elliot and Jason Schwartzman. The spot also starred the Amazon Echo, a product that can “stream music, order things and … turn on the lights.” And as a bonus, viewers got to see Baldwin lob insults at Marino. National treasure, indeed.

Quicken Loans

The mission: Make getting a mortgage sound cool. Quicken Loans aimed at younger homebuyers with this 60-second commercial for its new Rocket Mortgage phone app. “What if we did for mortgages what the Internet did for buying music, plane tickets and shoes?” the lender asks. The central thesis is that a boost in home buying — brought on by the simplicity of the Quicken Loans app, of course — will strengthen other sectors of the American economy.

Mountain Dew

Puppy. Monkey. Baby. This commercial was, frankly, terrifying. But it did get people talking. Of course they were mostly talking about the Puppy Monkey Baby and not the product, which was Mountain Dew (in case you didn’t notice).

Apartments.com

Here’s one for the multifamily crowd. Actor Jeff Goldbloom returns in the latest installment of this well-known ad campaign for the online apartment listing service Apartments.com. In this commercial, Goldbloom’s Brad Bellflower plays the piano and sings “Movin’ On Up,” the theme song from the TV show “The Jeffersons,” as he’s being raised (by crane) up the side of an apartment building. At one point, he even meets George and Weezy … just not the George and Weezy you’re probably expecting.

Realtor.com

Actress Elizabeth Banks stopped by to remind you that if you don’t use Realtor.com‘s app, you don’t like “sunshine, three-day weekends or puppies.” Shame on you.

Denver Hot Spots for Watching the Super Bowl

Denver Hot Spots for Watching the Super Bowl

February 2016

DenverWith the price of a Super Bowl ticket starting around $3,000, the average football fan won’t be able to make it to Levi’s Stadium in San Francisco on Sunday.

So what’s a Denver Broncos fan to do? Bisnow has a nice rundown of the top seven Denver bars where fans can watch the Broncos and Panthers face off.

The list starts with Diebolt Brewing — home of the $16 pitcher and $1 hot dog — and only gets better from there, with spots like Elway’s, Sports Column and more. Check it out!

JLL’s Roger Staubach Predicts the Super Bowl Winner

JLL’s Roger Staubach Predicts the Super Bowl Winner

Roger Staubach

Quarterback Roger Staubach won two Super Bowls with the Dallas Cowboys.

February 2016

Sunday’s Super Bowl at Levi’s Stadium in San Francisco promises to be a matchup of quarterbacks headed in opposite directions, with rising star Cam Newton and the Carolina Panthers taking on aging legend Peyton Manning and the Denver Broncos.

Las Vegas is siding with Newton, making the Panthers a 5.5-point favorite as of Thursday evening. But another quarterback legend — two-time Super Bowl champion Roger Staubach of the Dallas Cowboys — teamed with CRE experts at JLL to make his own prediction.

Is Staubach taking the favorite? Is he calling for Manning to have one final triumph? Click here to hear the former Super Bowl MVP make his case for the winner of Super Bowl 50.

Emerging Trends Report Highlights 18-Hour Cities, Suburbs

Emerging Trends Report Highlights 18-Hour Cities, Suburbs

February 2016

Emerging trends

San Diego is an 18-hour city that is gaining popularity.

The Urban Land Institute has released its annual Emerging Trends in Real Estate report, painting a picture of a real estate market that might not be down but is certainly changing.

GlobeSt.com has the full report, but here’s a quick snapshot of some of the emerging trends highlighted by ULI:

  • 18-hour cities: The rise in interest among markets like Austin, Denver, and San Diego was detected in last year’s report, and ULI sees that movement outside of 24-hour gateway cities continuing. 
  • Moving to the suburbs: Within gateway markets, rising prices are leading investors to consider suburban opportunities. Millenials may favor downtown areas and urban environments now, but it’s only a matter of time until marriage and family push them to the suburbs. Suburbs that also offer the benefits of an urban setting should do well.Private equity
  • Office strength: Look no further than the office sector for signs of continued economic recovery. Office jobs have accounted for more than one third of the employment gain, bringing vacancy down and pushing rents up. That’s a trend that should hold in 2016.
  • Moving forward: Home ownership rates dropped drastically during the global financial crises, settling in at 63.4 percent in the second quarter of 2015. ULI expects the future housing to be shaped by a necessity to improve housing options for everyone.

Keep an eye out for more on ULI’s findings in the weeks ahead.

JLL Ranks Top Cities for Innovation

JLL Ranks Top Cities for Innovation

January 2016

Three fast-rising cities have broken into the top five of the annual City Momentum Index published by brokerage firm JLL and reported by GlobeSt.

The City Momentum Index highlights the top cities in the world for creating environments that attract business, technology and foreign investment. Innovation-rich cities dominated the top 10, illustrating the importance of building an economy through technology and creating new businesses.

Boston_Financial_District_skylineBoston ranked second nationally — behind Silicon Valley, CA  and fifth globally. Now, thanks to record rent growth, its lowest vacancy rate in eight years and strong global investment, Boston has given the United States two cities in JLL’s top five.

“This year was further recognition that Boston is one of the most important ‘innovation hubs’ in the world,” JLL New England research manager Lisa Strope told GlobeSt.com.

The City Momentum Index is published annually. To arrive at its rankings, JLL studied 120 global cities and used 37 social and economic indicators.

The full list of the global top 10 is:

  1. London
  2. Silicon Valley
  3. Dublin
  4. Bangalore, India
  5. Boston
  6. Shanghai
  7. New York City
  8. Sydney
  9. Beijing
  10. San Francisco
Multifamily Markets Expected to Shine in 2016

Multifamily Markets Expected to Shine in 2016

Multifamily markets

The multifamily market of Washington, D.C., is poised to do well in 2016. (Photo by Ad Meskens/Wikimedia Commons)

January 2016

Experts from around the country hinted at their expectations for the year ahead in a recent wide-ranging GlobeSt.com feature on multifamily markets.

Much of the conversation centered on which multifamily markets will do well in terms of transactional activity in 2016. Multifamily performance has been strong in most markets during the economic recovery. But there are a few places to watch as investors continue to seek out rent growth and low vacancy rates.

Multifamily investment sales

Multifamily investment sales set records in 2015.

Multifamily investment sales set records in 2015.

Start with the old standbys New York, Washington, D.C., Miami and San Francisco. Bryan Sullivan, VP of acquisitions and investment at the Habitat Co., said those primary markets are still pulling in institutional and foreign capital. That’s especially good to see in the case of Washington, D.C., which underperformed in the first half of 2015 before seeing a drop in vacancy rates and some mild rent increases. Its multifamily market is on the mend.

Investors will also look to changing markets like Denver, Chicago, Atlanta, Charlotte and Nashville. What makes them changing markets? An influx of young professionals and companies that has legitimized some overlooked neighborhoods. Sullivan cited the example of Chicago’s West Loop, which has seen its growth start to accelerate.

As per usual, Millennials will be a factor. Gary Goodman, SVP of Acquisitions at Passco Cos., made a point to highlight Southeastern markets like Atlanta, Nashville and Tampa as especially appealing to that demographic. As a result, they are expected to be strong multifamily markets. These are trends we’ll keep an eye on!

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