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Real Estate, No Longer a Dirty Word

Fri, 07 Jun 2013 00:50:18 +0000

The opening panel at the ULI Real Estate Finance and Investment conference at Dean Schwanke, SVP of Urban Land Institute.

Part 1 of 2

SAN FRANCISCO-Real estate is no longer a dirty word; it is a well-performing asset class. So said David Lynn, EVP and chief investment strategist of Cole Real Estate Investments, during a discussion about the CMBS market here yesterday at the ULI Real Estate Finance and Investment conference. Real estate is much safer than it has been for some time and for the borrower and lender, it is an attractive environment.

The CMBS market, Lynn said, was scarce two years ago, but is now much more broadly available. There is a real need for it and investors want the yield … CMBS makes sense.

It makes sense, Lynn continued, particularly in the secondary and tertiary markets where there has been a financing gap, but it doesnt necessarily make sense in the primary.

The conference brought together both providers and users of capital to explore key trends that are driving successful real estate investing today. Lynn was a panelist on the opening panel, moderated by Dean Schwanke, SVP of Urban Land Institute.

The panel began with a reviewed ULIs recent consensus forecast, a three-year forecast for 27 economic and real estate indicators. The survey was undertaken from March 4 to march 25, 2013.

Industry experts gather at UCSFs Mission Bay Conference Center for a networking break.

Among other things, the consensus predicted that: Real GDP Growth will continue getting better; showed inflation will increase up to 3% by 2015; cap rates are expected to fall this year and then rise up to 6.2% next year; transaction volume is expected to rise; strength continues on the industrial and warehouse side, with rental rates expected to grow; rental rates for office is expected to grow for the next three years; hotel occupancy rates will continue to rise over the next few years; and home price increase are expected to be stronger, well above inflation.

Richard Sinkuler, partner and global real estate markets leader of Ernst Young,commented on the consensus GDP growth prediction, noting that there are still a lot of headwinds if you look at things globally. There is still some uncertainty and that uncertainty is our enemy because it is still making people who make decisions say, oh well, we will wait and see. And it is four years now of a slowdown.

But Andrew Nelson, director of research and strategy at Deutsche Asset Wealth Management, thought there is a better picture to paint. Sure, the public sector is very much standing in the way right now, he said, but the private sector is recovering nicely. It is a normal kind of reaction to such a severe downturn. It is kind of a bamboo thing where it takes several years underground before it is going to shoot up. We are seeing some positive things like exports increasing and job growth, for example.

Lynn added that there are more positives than negatives. The private sector is in relatively good health. Exports are increasing for the US. We are becoming a major energy power and that isnt insignificantit is helping our economy is a variety of ways, he said. Consumers have been deleveraging over the past several years and are in better shape. They are beginning to re-lever again.

But the big worry is still the jobs picture, which Lynn said has been anemic. It is a new normal, said Lynn, but it is a pretty good environment for real estate. You are seeing fundamentals improve in all sectors. The debt part of this has been very attractive. The economy is gradually improving and the cost of capital is very attractive.

Check back with GlobeSt.com for part two of this panel discussion, where the panel touches on the 10-year treasury, and on a majority of returns stemming from income.

Article source: http://www.globest.com/news/12_619/sanfrancisco/finance/Real-Estate-No-Longer-a-Dirty-Word-334129.html

Many US Cities Becoming Sellers’

Fri, 15 Feb 2013 23:38:30 +0000

EMERYVILLE, CAZipRealty, Inc.(http://www.ziprealty.com),the leading online technology-enabled residential real estatebrokerage company, has released a list of the Top 10 Best Cities for Home Sellers as part of its List Price to Close Price Ratio Report, which is based on MLS data covering 32 U.S. markets. The exclusive study found that the gap between the listing price and closing price of an average home in the United States continues to narrow, with a growing number of sellers able to achieve more than 98% of their homes listing price. In addition, the median days a home spent on the market dropped to 44 nationwide in 2012, a 23% decline from 2011s 57 days.

A limited inventory of homes on the market, combined with the extremely low cost of mortgage financing, has resulted in homes selling above asking price in many western markets, boosting the average listing to closing price ratio, explains Lanny Baker, Chief Executive Officer and President of ZipRealty. The median amount of time that homes are listed on the market before they sell has shortened by more than two weeks since last year, and in some areas we are seeing one-in-five newly listed homes sell in less than seven days. Multiple-bid situations are also increasingly common in the markets we reviewed.

In January 2011, the list to close price ratio in the U.S. reached 97.1%, and increased 40 basis points to 97.5% in 2012. The ratio hit 98.3% nationwide as of December 2012, according to ZipRealty data.

TheTop 10 Best Cities for Home Sellersbased on ZipRealtys List Price to Close Price RatioReport are: San Francisco, San Diego, Sacramento, Las Vegas, Los Angeles, Orange County, Denver, Tucson, Portland and Seattle.

Article source: http://www.globest.com/news/12_540/sanfrancisco/other/Many-US-Cities-Becoming-Sellers-Real-Estate-Markets-According-to-ZipRealty-330074.html

Rentals Chip Away at Home Builder Gains

Fri, 18 Jan 2013 08:01:26 +0000

“Single family starts did ‘improve’ suddenly early in 2012 on the Twist gap down in mortgage rates, but it quit ‘improving’ several months ago. Once 2013 data start to come in, the segment could quickly go from year-over-year positive to year-over-year negative over the period of a month or two,” argues Hanson. “Multi-family has reached escape velocity; single-family is stuck in the mud.”

Developers are rushing to increase supply of multi-family apartments, as there are now more This even as single-family rentals continue to gain market share. Continued uncertainty in the housing market, tighter mortgage underwriting and weaker consumer wealth has pushed ever more Americans to rent; the foreclosure crisis forced others.

The boom in multi-family is already raising red flags.

“We are incrementally more cautious on the multi-family sub-sector, as we see a rising supply environment in 2014,” note analysts at Cantor Fitzgerald. “Although at this point, data indicate demand remains strong and absorption in check.

(Read More: One Overlooked Fact About the Housing Recovery)

Apartment demand increased “noticeably” in the fourth quarter of 2012, according to Reis Inc. This despite record-low mortgage rates and renewed faith in the housing market. Rents continued to rise, although at a slower pace than the previous quarter. They still managed to hit another all-time high, “propelled by strong demand, limited new supply growth, and a still weak for-sale housing market.”

The single-family housing market is rebounding off its historic lows, but the very limited supply of homes for sale gives cause for concern.

Low inventories are pushing prices higher, faster than expected. All-cash investors are pushing those gains, and in turn pushing out first-time home buyers. While non-investors are slowly moving back into the market, they are not arriving in the necessary numbers, and they are also not finding much to choose from.

(Read More: Home Builder Confidence Stalls)

Article source: http://www.cnbc.com/id/100388194

Manhattan Property Sales Spike on Fears of Tax Hikes

Fri, 04 Jan 2013 01:07:52 +0000

The price gains, however, were largely on the luxury end. In looking at the median prices, where half sell for higher and half sell for lower, prices for co-ops were up just 2.1 percent in the fourth quarter. Condominium prices actually fell just under one percent. (Read More: Extravagant Home Features of the One Percent.)

The median price in the luxury market, however, was $4,440,150, up 7 percent from a year ago, according to Douglas Elliman. The luxury market represents the upper 10 percent of all co-op and condo sales.

“The year-end jump in sales was a function of proactive tax management by property owners. Although it wasn’t clear what form the tax hikes related to housing would take, it was assumed that 2013 would be higher than 2012,” noted Jonathan Miller, CEO of Miller Samuel, which provides the Elliman report data. (Read More: Million Dollar Winter Wonderland Homes.)

Prices in Manhattan are still about 6 to 7 percent off their pre-recession highs, but low supply will likely narrow that gap in 2013. Strong demand from foreign, all-cash buyers is also boosting prices, especially in the condo market. Gains, however, may slip in the current quarter, as so much demand was pulled forward.

Article source: http://www.cnbc.com/id/100351956

Take a tour of San Francisco office buildings for sale

Fri, 13 Jul 2012 09:30:54 +0000

225 Bush St. — the Standard Oil Building.

J.K. Dineen
Reporter- San Francisco Business Times

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Downtown San Francisco is for sale. With values reaching, and in some cases surpassing, the peak reached in 2006, property owners are rushing to market with a wide range of building types.

Click the image to see a slideshow of S.F. buildings on the block.

Properties being offered include Hines

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iconic 101 California St., which has never sold before and could reach $1 billion. There are historic buildings like 225 Bush St. and corporate headquarters properties like 50 Beale (Bechtel) and 550 Terry Francois Blvd. (the Gap)

The stream of pending deals will create a welcome cash flow into city coffers.

With two transfer tax increases passed over the past few years, San Francisco now has a 2.5 percent transfer tax for transactions over $5 million. If everything sells that is currently on the block, the city could raise $125 million.

That is a lot of DPW workers, teachers, social workers, police officers and park directors.

J.K. Dineen covers real estate for the San Francisco Business Times.

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Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2012/07/take-a-tour-of-san-francisco-office.html

Will Price Gap Between Sacramento and San Francisco Bring Home Buyers East?

Sun, 06 Nov 2011 11:12:12 +0000

Twenty-nine cents on the dollar. That’s what homebuyers now pay for a typical house in the Sacramento region compared to buyers in San Francisco. And if history is any guide, that mounting price gap could have a big impact on Sacramento’s housing market and economy in the not-too-distant future.
The last time the spread between Bay Area median prices and Sacramento median prices grew so big was a decade ago, just before tens of thousands of Bay Area transplants arrived in Sacramento, turning a healthy housing market into a bona fide boom.

Since then, that wave of transplants has slowed to a drip, with barely more residents relocating from the Bay Area to Sacramento than heading in the other direction.

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Article source: http://www.gayapolis.com/news/artdisplay-realestate.php?artid=11946