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
By cooperj on October 17, 2011
The Southwest Chapter of NARPM recently conducted a survey to show vacancy rates among single-family homes and multi-family units (2-15) in Ada and Canyon County. Twenty-four property management companies responded. Below are the results.
The rental market is continuing to strengthen as more home owners are displaced due to the foreclosure crisis. Boise, recently ranked #8 on CNN Money’s top 100 cities, is seeing an influx of new residents, many of whom are opting for rentals. Click here for the complete survey data.
Posted in Multifamily | Tagged Boise, Idaho, Jackson Cooper, multi-unit, multifamily, real estate, SVN
By cooperj on September 22, 2011
Ronald M. Peters’ team from Peters & Associates recently completed two attractive dispositions for corporate owners totaling over one million square feet of surplus real estate. Both transactions used the charitable method called a bargain sale, when a charity purchases a property at below the predetermined fair market value. The difference between the market value and the lower charity purchase price can be a considered a tax donation for the selling company, a preferable option considering that both of these facilities were wasting company resources and time with their respective surplus properties.
These bargain sales, along with donations, are popular alternatives for a wide range of business and individual property owners, and despite what many believe, are as straightforward as a conventional sale. The only difference is that instead of cash, tax benefits are available. At some point these tax deductions are manifested into cash, thus very valuable.
The Nuts n’ Bolts of Charitable Donations
• The donor must first establish its intent to donate.
• The property must be appraised according to its highest and best use in the current marketplace. Full procedures must be followed through an IRS publication.
• The donation can give a corporation client a tax deduction that can be used based on their adjusted gross income.
• Charitable donations tend to work best for hard-to-sell properties, but also work well for high-priced properties where the seller can benefit from the substantial difference between the market value and the accepted donation value.
• When working with the right charity, these transactions are generally completed quicker than low-value sales.
Read the complete article from CoreNet Global’s publication.
Posted in Uncategorized | Tagged bargain sale, CRE, Idaho, Jackson Cooper, real estate, SVN
By cooperj on September 8, 2011
The era of “Extending and Pretending,” a topic we’ve discussed quite a bit in this blog (see March 25, 2011, December 3, 2010, and July 14, 2010) appears to have run its course. Statistics show that lenders and note holders have begun to force more distressed loans into the market. Institutional investors, who had big pockets but little inventory to choose from in 2009 and 2010, are back in search of investment-grade CRE.
Investment-grade properties account for much of the increased transaction activity from the first quarter of 2011 to the second quarter, according to the latest CoStar Commercial Repeat-Sale Indices. In the investment grade index, the percent of distressed sales increased from 32.3 percent of the activity in May 2011 to 34 percent of the activity in June 2011.
Banks’ prevalent “extend and pretend” strategies in 2008-20110 have resulted in many loan maturities this year. The second half of 2010 saw modifications of principal and interest rate reductions began to make up an increased share of overall market activity. This allowed for banks to start releasing loans they did not want to modify back into the market. Thus, the opportunities for investors to acquire properties through foreclosures on attractive terms have also increased.
Read more at CoStar.
Posted in Uncategorized | Tagged Banks, CRE, Distressed, Idaho, Jackson Cooper
By cooperj on August 22, 2011
According to CoStar Group data, total multifamily sales in the U.S. spiked 80 percent in the second quarter of 2011 over the same period in 2010, a statistic that exemplifies America’s recent paradigm shift from home ownership to apartment renting. This increased demand has resulted in the steady lowering of vacancy rates and increase in rental prices.
While still significantly lower than the mid-2007 peak, Q2 2011 saw a strong $15 billion in sales from multifamily properties, bringing the annual total to $24.5 billion. Apartment buildings rank as the most sought after commercial real estate investments. As cap rates for existing properties have narrowed in some top-tier markets, multifamily developers have begun to engage in new projects.
As has been the case for throughout the last couple years, coastal markets have accounted for much of the aforementioned sales volume. Top markets include Washington D.C. with $2.6 billion, Los Angeles with $2.3 billion, and the Bay Area with $2.1 billion. Institutional investors have been by far the most active apartment buyers.
For more, read the article from CoStar Group.
Posted in Multifamily | Tagged apartment, CRE, Jackson Cooper, multifamily, real estate, SVN
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.
