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Commercial, Multifamily Originations in U.S. To Go Flat in 2018

The Mortgage Bankers Association (MBA) projects commercial and multifamily mortgage originations in the U.S. will increase in 2017, ending the year at $515 billion, up 5 percent from the 2016 volumes.

Yet, the MBA also expects volumes to remain at roughly that level in 2018. MBA forecasts mortgage banker originations of just multifamily mortgages at $235 billion in 2017, with total multifamily lending at $271 billion. After strong growth in 2017, multifamily lending is expected to slow slightly in 2018.

Read more here.

Report: Salt Lake Ranks No. 3 In U.S. for Real estate Investment

Utah’s capital city has joined the ranks of the top cities in America for commercial real estate investment, a new report indicates.

This year’s top cities in the “Emerging Trends in Real Estate 2018,” released Thursday by financial services provider PricewaterhouseCoopers and the Urban Land Institute were led by top-rated Seattle, followed by Austin, Texas and Salt Lake City at No. 3.

It was the Utah capital’s first top 10 ranking in the annual report, making it the least populous city to ever break into the top 10.

Read more here.

Hurricanes Create Rise in Costs, Delays On Georgia Commercial Real Estate Projects

Contractors, suppliers and commercial real estate lenders in Georgia are seeing some impacts from recent hurricanes Harvey and Irma.

Read more here. (subscription)

Amazon Makes Warehouses ‘Sexy’ Again, Real Estate Exec Says

Amazon Makes Warehouses 'Sexy' Again

It might sound counterintuitive, but brick-and-mortar store-killer Amazon may be boosting parts of the real estate market.

The e-commerce giant has “made the warehouse sexy,” Raj Dhanda, president of private equity real-estate firm Black Creek Group, told CNBC’s “Squawk Box” on Thursday. Big and bulky warehouses have rapidly become the “hottest” component of commercial real estate, Dhanda said.

During the first half of the year, investment sales in the industrial real estate sector totaled $23.8 billion, according to real estate investment firm Jones Lang LaSalle. That translated to a growth of more than 20 percent.

Read more here.

Study Points to Hotel & Office Sectors As Best Bets for Commercial Real Estate Investment

Office Sectors As Best Bets for Commercial Real Estate Investment

Thirty-four percent of institutional investors believe the biggest real estate investment opportunities are to be found in the office sector, while the same percentage say the hotel & hospitality industry will present the best opportunities for commercial real estate over the next 12 months, according to a new study by real estate investment firm BrickVest.

BrickVest’s study showed that three in ten (31 percent) institutional investors thought the industrial sector would present the biggest commercial real estate investment opportunities over the next 12 months while one in five (19 percent) cited the retail & leisure sector.

Read more here.

Machine Learning Used to Value Real Estate

Determining the value of a commercial real estate, among the largest of asset classes for investors, remains difficult, likely lending itself to the application of new machine-based valuation models that among other things take advantage of “hyper-local” information about real estate locations.

In a paper published in June, Dutch researchers argued that an “automated valuation model” outperformed traditional real estate appraisals, with an error rate of about 9 percent.

The model also brings with it the ability to “produce an instant [property] value at every moment in time, at a very low cost.” the researchers said in a paper title: “Big Data in Real Estate? From Manual Appraisal to Automated Valuation.”

Read more here.

What Interest Rate Hikes Mean for Multifamily Real Estate Owners

What Interest Rate Hikes Mean for Multifamily Real Estate Owners

A third interest rate hike this year is widely expected by the end of 2017, with the U.S. economy looking strong despite unusually low inflation. Let’s take a look at the potential effects of continued rate hikes on commercial real estate financing, particularly on multifamily borrowers.

The 10-year Treasury yield increased 67 basis points in the 15 months from July 2016 to mid-October this year (closing at 2.37 yesterday), in the course of which the overnight rate has increased three times, in December, March, and June. If there continue to be more rate hikes, it is possible that longer-term interest rates will rise as well.

Read more here.

Why Your Brain Makes You Get Real Estate Investing Wrong

Why Your Brain Makes You Get Commercial Real Estate Investing Wrong

Many assume the real estate investment decisions they make are rational, but what if they are not? A new research paper called “Addressing built-in biases in real estate investment,” produced by Fidelity International, takes the tenets of behavioral psychology and economics and applies them to institutional commercial real estate investment.

Author Matthew Richardson shows how the decisions commercial real estate investors make, which they think are rational, often lead to herd-like behavior and emotional reactions that cause the bubbles and crashes the sector experiences on a fairly regular basis.

The paper is topical — Richard Thaler, the economist who did much to advance the field of behavioral economics, was awarded the Nobel Memorial Prize in economics last week.

Read more here.

Is The Open-Office Plan Dead?

Tired of hearing other people’s conference calls and weird food smells at work? You are not alone — open-office plans are increasingly taking the heat, and the model is shifting.

Charlotte’s CRE leaders say offices of today are based on flexible space, taking priority over the fun-yet-complicated early 2000s open-office plans. And the CEO is no longer calling all the shots.

Read more here.

Why Is the Government Giving Money to Dying Malls?

Why Is the Government Giving Money to Dying Malls

As online shopping upends the retail business, the pool of buyers for properties is drying up. Sales of malls and other types of shopping centers are at the lowest level since 2012, according to Real Capital Analytics Inc., a real estate research firm.

The drumbeat of negative news for brick-and-mortar stores is taking a toll on shares of mall operators, which have tumbled 17 percent this year, according to a Bloomberg index.

In this depressing landscape, there is at least one player still willing to take the risk: local governments hungry for tax revenues.

Read more here.

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Tags: commercial real estate, commercial real estate investing, commercial real estate news, Hurricane Harvey, multi-family properties, Office buildings, Warehouse industrial properties