By cooperj on May 9, 2012
As outlined in our previous entry, the Treasure Valley has seen marked economic improvement characterized by steady, broad-based job growth and increasing property values, both residential and commercial. Valley County, whose idyllic mountain towns serve as second home sites for many in the Treasure Valley, is expected to benefit from this recent trend. As a result, McCall, Donnelly, and Cascade land and home sales should see strong increases in the next year and a half.
In addition to this “trickle down” property value relationship, Valley County is beginning to see improvements in its overall economic infrastructure, potentially providing the county with a more solid, autonomous foundation for long-term economic health. Midas Gold, a mining company publicly registered in British Columbia, Canada, has control of 24,000 acres in the Stibnite, Yellow Pine area and is calling it “The Golden Meadows Project.” Midas is expected to complete their preliminary exploratory drilling and environmental permitting processes this summer. Midas Gold currently has approximately 150 full-time workers at the project. The company has raised approximately 85 million dollars to begin the mining of four minerals. The project could employ as many as 350 full-time workers when permitted.
Another boost for Valley County will be the eventual disposition and/or resolution of Tamarack Resort, which is expected to come to a head before the end of 2012. It is anticipated that the ill-fated resort go to the court house steps this year, where either Credit Suisse or an outside investor will step in and buy this Valley County Gem. Either way, the project will move forward in some fashion, creating significant construction-related employment, further aiding in the increase in area property values.
Posted in Uncategorized | Tagged commercial, CRE, Jackson Cooper, McCall, real estate, Sperry Van Ness, Valley County
By cooperj on April 2, 2012
Like many cities across the U.S., Boise and its surrounding communities are finally seeing measurable signs of emerging from the depths of the Great Recession. Stories of progress are beginning to replace the doom and gloom reports that became commonplace from 2007 to 2011. According to recent data from the State Department of Labor, Idaho businesses hired more than 11,000 workers in February 2012. The state’s unemployment rate dropped a tenth of a point to 8 percent, the lowest since September 2009. The Boise Metro area has fared particularly well, seeing the year-over-year unemployment rate drop from 8.7 percent to 7.9 percent.
The Brooking Institution ranked Boise 11th among 100 of the nation’s largest metropolitan areas in employment growth from Q2 to Q3 2011. According to Mark Muro, a policy director at Brookings, “Boise’s jobs recovery has been pretty broad-based across sectors. “All major segments of the economy except leisure and hospitality have added jobs since the region hit (its) trough — even construction.”
Unlike past brief recessions, the several-year period marked by plunging housing prices, high unemployment and subsequent snail-paced climb back to stabilization, has altered the attitudes of many people. One these paradigm shifts is in the housing industry, where the long-time belief of home ownership as an essential ingredient to achieving the American Dream has been re-defined by those burned by foreclosure and handcuffed by strict lending standards
As we’ve reported in several blogs, the multifamily sector has experienced significant growth in the wake of the housing disaster. This boom in apartment interest and new mindset among renters was outlined in an article from The Idaho Statesman this past summer. According to the article, the renter group increased significantly on both ends of the spectrum – younger adults delaying their first home purchase and older, former homeowners returning to rentals. In the first six months of 2011, 38 duplexes, four triplexes, 35 four-plexes, and seven apartment buildings were sold in Ada County. “Investors are starting to buy rental property again,” said P.J. Chapman, owner of Chapman Properties in Boise. “If you’ve got the money, now is the time to buy.”
Further Reading:
Valley Rental Vacancy Rates Hit 5-Year Low
http://www.idahostatesman.com/2011/07/20/1732253/valley-rental-vacancy-rates-hit.html
Boise Shows Post-Recession Life
http://www.idahostatesman.com/2011/12/15/1916790/perked-up-economy-boise-shows.html
Idaho, Boise Unemployment Rates Drop Again
http://www.boiseweekly.com/CityDesk/archives/2012/03/23/idaho-boise-unemployment-rates-drop-again
Posted in Uncategorized | Tagged Boise, commercial, Jackson Cooper, real estate, recovery, Sperry Van Ness, SVN, treasure valley
By cooperj on March 8, 2012
As banks loosen credit standards, the end of the four-plus year housing crisis is in sight.
Largely due to the slight ease of banks’ vice-like grip on lending and high credit standards, Capital Economics expects the housing crisis to end in 2012, according to a recent article from DSNews.com. Borrowers can now obtain a loan for as much as 3.5 times their earnings, up from 3.2 during the middle of the crisis. At 700, the average credit score to attain a mortgage loan is also up from mid-crisis levels.
Increased loan-to-value ratios, from 74 percent in 2010 to the current mark of 82 percent, are evidence that banks are more confident in lending. This, according to Capital Economics, is “the clearest sign yet of an improvement in mortgage credit conditions.”
While encouraging, these modest statistical improvements are not yet significant enough to result in gains in housing prices. Read similar more articles from DSNews.com.
Posted in Uncategorized | Tagged Boise, CRE, Idaho, Jackson Cooper, loans, real estate, recovery, Sperry Van Ness, SVN
By cooperj on February 26, 2012
Further strengthening the argument that commercial real estate is indeed finally on the rebound is the fact that the aggregate value of bank and CMBS real estate loans sold in 2011 achieved values not seen since 2008, according to CoStar Group.
Whole real estate loans from the FDIC, both commercial and residential, saw a dramatic increase in selling for 84 percent of their book value, compared to a meager 34 percent in 2010. Performing real estate loans faired even better, enjoying nearly full price realization at 91 percent of book value. Colony Capital Advisors and Oak Tree Capital were among the most active buyers of FDIC loans, each purchasing structured interests worth $1.78 billion of sub and non-performing FDIC-financed real estate loans.
The information below illustrates the steady year-over-year climb of loan values.
CMBS loans priced by online debt trader, DebtX
December 31, 2011 86.1%
November 30, 2011 85.2%
December 31, 2010 79.4%
“CRE loan prices in December rose to their highest level in more than two years,” says DebtX CEO Kingsley Greenland. “The price increases are the result of a decline in treasury yields, a decrease in credit spreads and improving CRE fundamentals.” Read more from CoStar Group.
Posted in Loan Sales | Tagged Boise, CRE, Idaho, Jackson Cooper, loans, real estate, recovery, Sperry Van Ness, SVN
By cooperj on February 6, 2012
While still below peak 2007 and 2008 levels, last year saw marked improvement in the lodging industry. Room occupancy crept past 60 percent and room rates returned to the $100 mark. The five percent increase in room demand in 2011 far exceeded most predictions.
Despite these improvements, room supply is only keeping pace with room closures. According to Randy Smith, Chairman of STR and HotelNewsNow.com columnist, the mercurial state of the financial markets have inhibited lender and developers to move up the construction pipeline. Commenting on the break in the long-term relationship between room rates and occupancy, Smith says, “(This) trend line highlights what I believe to be one of the key issues confronting the industry—what has happened to pricing integrity.”
Given the better-than-expected performance from the lodging sector last year, Smith expects to see only modest gains in room demand in 2012. Read the complete article from HotelNewsNow.com.
Posted in Hospitality | Tagged Boise, commercial, CRE, hospitality, Idaho, Jackson Cooper, real estate, Sperry Van Ness, SVN
By cooperj on January 22, 2012
Amidst a snail-paced economic rebuild, still-high unemployment, and tightened lending standards, record-low mortgage rates and home affordability have not been enough to entice would-be and former homeowners to purchase real estate. As such, the apartment sector continues to thrive.
According to REIS, Inc., the fourth quarter of 2011 saw the apartment vacancy rate drop to 5.2%, the lowest since 2001, and the sector’s largest quarterly increase in occupied stock. “Higher quality properties in the most desirable locations posted rent gains in excess of 5-10%, while class B/C properties, catering to lower income tenants, found it relatively more difficult to raise rents,” says Victor Calanog, head of research at REIS. Read more from USAToday.com.
Check out the available properties from Sperry Van Ness/Jackson Cooper.
See the rest of our multifamily/apartment blog entries.
Posted in Multifamily | Tagged apartment, Boise, CRE, Idaho, Jackson Cooper, multifamily, real estate, recovery, Sperry Van Ness, SVN
By cooperj on January 15, 2012
Apartment properties continue to outperform all other commercial real estate sectors. In November, sales of significant units totaled 280 at over $3.4 billion, according to the December 2011 Apartment Month in Review from Real Capital Analytics. While November’s apartment statistics were relatively unremarkable compared to recent months, they were slightly above last November’s tally. For all of 2011, an estimated $50 billion changed hands for apartment transactions, up significantly from $35.2 billion in all of 2010. While mortgage rates have fallen more dramatically, cap rates for apartments are down to 6.3% nationally, a compression of 30 basis points over the past six months. Sign up at Real Capital Analytics for complete up-to-date commercial real estate analysis.
See our 2011 apartment/multifamily blog entries:
Apartment Sector Unique in its Recovery
October 27, 2011
Favorable Demand-Supply Conditions Have Strengthened U.S. Multifamily Market
August 22, 2011
Multifamily Investment Strong in 2011
May 20, 2011
Multifamily Outlook – 2011
April 1, 2011
Posted in Multifamily | Tagged apartment, Boise, CRE, Idaho, Jackson Cooper, multifamily, real estate, recovery, SVN
By cooperj on January 9, 2012
Opinions on how commercial real estate will fare in 2012 vary wildly. Some predict significant improvement, especially with the multifamily sector, while others envision a borderline apocalyptic scenario where banks collapse and inflation spikes out of control. Most analyses lie somewhere in the middle, with uncertainly continuing to be the overriding sentiment, much as it was in 2011. In this blog we want to focus on two indicators that bode well for CRE recovery in 2012.
Small Businesses Feeling Good! (Or, at least better)
After several years of taking it on the chin, small business owners are finally feeling better about sales, hiring, and expansion potential over the next half-year, according to the latest national index by the National Federation of Independent Business (NFIB), which shows a 1.8% rise in its November Optimism Index. In this report, which comprised 781 randomly sampled small businesses, eight of ten index components improved or remained unchanged. While encouraged, this advocacy group is quick to point out many small businesses continue to face an uphill battle. Read more from The CoStar Group.
Leasing Commercial – Everybody’s Doing It!
On the heels of a period of unprecedented foreclosures, underwater ownerships, and a dramatic increase for the need of rentals, residential properties appear to be on the cusp of a measurable, albeit slow, recovery. For a multitude of reasons, including easier access to capital and incentives from property owners and management companies, commercial real estate leasing prices also show encouraging signs of improvement. Reality Biz News, through several sources, recently published an article and inforgraphic which compares leasing and buying. Read the article here.
Posted in Uncategorized | Tagged Boise, CRE, Idaho, Jackson Cooper, multifamily, real estate, SVN
By cooperj on November 28, 2011
The inextricable link between employment and the health of commercial real estate is important to note. The most recent data from the Bureau of Labor Statistics indicates slow progress, exemplified by the four-month period in which the unemployment rate dropped a mere one-tenth of one percent from 9.1% to 9.0%. The U.S added 80,000 jobs in October, which was notably lower that the predicted 95,000. Economists generally agree that in order to see a half-percent drop in unemployment per year, the nation needs to add 150,000 jobs per month. Nonetheless, while snail paced, there is measurable improvement on the jobs front.
This type of slow quarter-by-quarter improvement can generally be seen in Boise commercial real estate. Recent Q3 2011 data (see below) from REIS provides in-depth statistical examination of the Boise office, apartment, and retail real estate sectors. For the complete report, visit www.reis.com.
Office Trend Data
Apartment Trend Data
Retail Trend Data
Note: Selected economic and demographic data are provided by Moody’s Economy.com.
Posted in Uncategorized | Tagged apartment, Boise, CRE, Idaho, Jackson Cooper, multifamily, office, real estate, retail, SVN
By cooperj on October 27, 2011
At $13.3 billion in total sales volume, the third quarter of 2011 was a strong one for the apartment sector, according to Real Capital Analytics. While growth in transaction volume slowed, cap rate compression accelerated. Year-to-date, apartment sales ($36.2 billion overall) have already surpassed the total from all of 2010. Transaction volume is similar to 2004 levels, prior to the condo boom. The wide gap in pricing between core and value-add is starting to close and buyers are also bidding down yields in secondary markets, further evidence of the apartment sector recovery. See our list of available properties.
The apartment sector is unique in that it is the only one showing positive fundamentals and is expected to stay strong. Distress, while still significant, is resolving steadily. See below for more information. Sign up at rcanalytics.com for complete data.
Apartment Investment Trends*
*Source: Real Capital Analytics
Posted in Multifamily | Tagged apartment, Boise, CRE, Idaho, Jackson Cooper, multifamily, real estate, SVN
