Exterior of large building with 2 story condos

While many commercial real estate sectors face challenges, multifamily properties are experiencing renewed investor interest, driven by high mortgage rates and increasing single-family home prices. A Comeback Investor confidence in office, retail, and industrial real estate has waned, but multifamily is gaining momentum. According to Altus Group’s Q3 2024 U.S. CRE Survey, 69% of investors…

Read More

When the Federal Reserve lowers interest rates, it can have a noticeable effect on real estate cap rates, as long-term yields are a key factor in real estate investment decisions. Sensitivity of Cap Rates to Interest Rates Research from CBRE Econometric Advisors (CBRE EA) indicates that real estate cap rates respond differently to changes in…

Read More
Exterior of large building with 2 story condos

The U.S. multifamily market saw significant growth in demand during the third quarter of 2024, with a total of 176,000 units absorbed—the highest absorption rate since Q3 2021. This surge in demand came close to matching the 178,000 newly delivered units during the same period, narrowing the supply-demand gap to its smallest margin in three…

Read More
Skyscraper

Here is a snapshot highlighting several key trends for commercial real estate (CRE) for the balance of this year. 1. Office Visits and Return-to-Office (RTO)– Office visits are being driven largely by employees living within three miles of their workplace.– Cities on the East Coast are leading the recovery in office building visits, suggesting a…

Read More

The U.S. multifamily and industrial real estate sectors are facing tightened insurance terms following unprecedented losses in 2023. Rising Costs U.S. housing construction reached its highest level in 36 years in 2023, with 440,000 new apartment units completed. Of these, 81% (356,400 units) were built using wood framing, which insurers have long viewed as a…

Read More

Enhanced Requirements Under the new guidelines, lenders will be required to independently verify borrowers’ financial information and funding sources for multifamily properties. This includes rigorous due diligence on property valuations and financial performance, addressing the current reliance on unverified borrower-provided data. Current Climate The rise in interest rates has caused a decline in property values,…

Read More

The multifamily sector in the CMBS market has experienced a sharp increase in distress, with delinquencies nearly tripling in just six months. Surge in Delinquencies CRED iQ’s latest report reveals that multifamily CMBS loans marked as delinquent or in special servicing jumped by 185% from January to late June. This significant rise marks the most…

Read More

Experts foresee numerous regional bank failures, significantly impacting real estate. Barry Sternlicht of Starwood Capital Group and Howard Lutnick of Newmark predict frequent regional bank collapses, potentially 500 to 1,000 by 2025-2026.  Causes and Effects: – Rising interest rates, declining asset values, and banks’ reluctance to adjust loan values contribute to this trend. – Commercial…

Read More

With major banks reducing their involvement in commercial real estate lending, CMBS (Commercial Mortgage-Backed Securities) is making a significant comeback by adapting to current market conditions, as reported by the Commercial Observer. Rebound: CMBS issuance has seen a remarkable resurgence, with U.S. private-label CMBS issuance reaching $32.2 billion in the first five months of 2024, compared…

Read More