Multi-Family Properties Might Be The Way To Multi-Millions

In the current commercial real estate market, investing in multi-family homes should be on the radar. Multi-family properties don’t always have to be 20 floor sky rise apartments in a big city. They can be smaller duplexes, town homes Read more

New Real Estate View: Why The Homeless Are Big Business In New York

It's a grim scenario: In New York, there are more than 50,000 homeless. Of that number, 21,000 are children, an increase of 21 percent from last year, according to a report by the Coalition for the Homeless, a New Read more

Red Is the New Green – Chinese Investors Eye US Assets

***This blog entry is a guest post from Elton Steinberg, Marketing Associate at United Realty*** American fund managers should be aware of current and future trends that may make the Chinese account for a more significant portion of overall foreign Read more

Gimme Shelter - Foreign Investors Seek Returns and Safe Haven in US Real Estate

***This blog entry is a guest post from Elton Steinberg, Marketing Associate at United Realty*** Foreign investment has been a significant driver of the US real estate market recovery. Investors from across the globe have been responding to negative stimuli Read more

commercial real estate blog

Multi-Family Properties Might Be The Way To Multi-Millions

In the current commercial real estate market, investing in multi-family homes should be on the radar. Multi-family properties don’t always have to be 20 floor sky rise apartments in a big city. They can be smaller duplexes, town homes or small condos. These smaller properties are recommended for startup investors.

Investing in multi-family homes is a great way to enter the real estate market. As opposed to investing in single family homes, the cash flow of multi-family homes is increasing due to lower property values, mortgage cost and rent increases. This can lead to many advantages for an investor. There is also less risk and less cost as opposed to owning five single family homes where you have to maintain five different properties. With all five families in the same building, there is only one roof to maintain and the tenants are in the same location.

With many unable to afford homes in the suburbs, the demand for multi-family homes is increasing. Also, the construction on new multi-family apartments is bouncing back. Many are having trouble finding stable jobs so they are leaning toward renting apartments as opposed to buying single family homes. The baby boomer generation is starting to live more frugally because they realize that they don’t have enough saved for retirement. As a result, they are spending less and recognizing that they can’t live their current lifestyles. They are working longer and see renting as a more cost efficient option. With the overall increase in demand, this inevitably leads to an increase in rent which makes investing in multi-family homes very attractive.

Now speaking of rent, if an investor is going to rely on rent to cover the property’s debt and operating costs, it is necessary for the investor to choose an area where the rent demand is high and the vacancy rates are down. Depending on the right location, a larger apartment can rent faster than a smaller one. Location is critical for a successful multi-family home to reap high rewards.

As new investors, starting off investing in multi-family properties is a good foundation for a strong and diverse portfolio. It is important to know all the “ins and outs” of the market. Evaluating past transactions and possible properties for transactions is essential. A small investment in a multi-family complex can be the outlet for a cash flow gaining investment. The right multi-family properties are income producing assets that provide great long term returns.

 

Posted on by Jacob Frydman in Commercial Real Estate, Guest Blog Post, Housing Market, multi-family, News, Residential Real Estate Comments Off

The Virtual Reality of Commercial Real Estate and Mobile Technology

Real Estate and Mobile Technology
The commercial real estate market is rebounding, and with that bounce-back, comes the increased use of mobile technology.

Commercial real estate used to rely on newspapers, magazines, radio and television ads to carry the message to the consumer, but those methods simply aren’t as effective in the 21st century. A “direct line” is more often than not facilitated by satellites in space, GPS towers, and apps downloaded onto a smart phone. To reach people where they truly live, you must slip into the virtual reality inherent in cloud computing, social media, and viral Web content. In a very real context, change has indeed come.

A recent report by inMotion Real Estate cited that mobile usage in commercial real estate is up 61 percent. And we can reasonably expect an increase this year if the trend holds. The report lists the iPhone, iPad, Sony Ericsson LT 15i Xperia Arc, HTC EvO 4G and the Motorola Droid X, as the top mobile devices of last year, with 25 percent of Internet consumption in the U.S. derived from mobile devices. In short, we carry the future of commercial real estate in our pockets. And more people are taking advantage of this technology.

Last month, the BE-Mobile app (from Building Engines), marked 1,000 downloads, and this should come as no surprise. The app helps the user to manage key operational tasks including work orders, preventive maintenance, incidents, and inspections – it’s all paperless.

And here’s something else to consider: Google Maps can now host your property with its Google Maps Floorplans app, which allows tenants or investors to better understand a building’s accessibility, suite layout, parking field and more. Additionally, it can be combined with Google Maps in 3D and a 360 Panorama by Occipital and you have a real virtual reality tour.

See? The future is truly occurring in real time. Mobile technology is the great equalizer at play in today’s society. How we capitalize – and innovate – within this seismic shift will depend on our ability to embrace this new present for a profitable future.

It’s a reality, however virtual, worth pursuing.

Posted on by Jacob Frydman in News Leave a comment

High Expectations for Commercial Real Estate

After shunning the asset class since the Financial Crisis, retail and institutional investors are tiptoeing back into commercial real estate. A batch of recent studies suggest commercial real estate should outperform nearly every other asset class in 2012. A new survey by the Pension Real Estate Association indicates investors expect an average return of 9.3 percent this year – a 140 basis point increase from what the survey indicated three months ago. PREA surveyed a total of 22 firms in the first quarter, representing investment managers, financial advisors and researchers.

The 22 member firms surveyed expect outperformance primarily in the NCREIF Property Index (NPI). The biggest returns, according to the survey, are expected in the apartment sector, with returns in the office, retail and industrial sectors expected to come in slightly lower, but still outperform.

Investor sentiment for all four property types has risen since the beginning of the year, along with the overall market. Despite the increased bullishness for 2012, the average forecast still predicts a gradual slowing in returns through 2013 and 2014 as investment in the sector heats up.  Apartments are expected to remain the hottest sector with projected annual returns of 10.9 percent. In the other sectors, respondents expect higher income returns in 2012 compared with apartments, but lower overall capital appreciation. Respondents expect the retail and office sectors to each return 8.9 percent. Industrial buildings, at 8.4 percent, was the laggard.

Looking past this year to longer term expectations reveals a different picture. Over a five year horizon to 2016, the office sector has the highest average return forecast, with industrial coming in second. It’s important to note that there is some disagreement amongst forecasters about the best performing sector over the next five years. Over one-third of respondents see the office space as producing the highest returns while the same proportion chose the apartment sector. Almost one-quarter see industrial as the best performer through 2016.

A new report from the global accounting firm Deloitte & Touche finds that Real Estate Investment Trusts (REITs) are well-positioned to outperform the market this year due to improvement in property fundamentals and market dynamics as well as their relative advantage as an alternative asset class.

Unlike pre-recession times, growth prospects of REITs are now heavily dependent on mergers and acquisitions and driving increases in rental income, due to limited development activity, the report found. Although there is no certainty about the relative outperformance of REITs over competing asset classes, an improvement in the broader economy will be the key to sustained growth for this asset class. In the long term, REIT’s may benefit from global expansion as emerging markets implement REIT provisions within their tax codes to facilitate real estate investment activity.

It is noted within the Deloitte report that the performance of REITs have been a bright spot within the CRE industry over the past two years. Improved access to capital drove significant transaction growth and REITs were able to acquire prime properties within major markets at favorable pricing due to the overall market distress. REITs continue to outperform the major markets and are favorably positioned during this economic uncertainty. REIT owners are expected to focus on property operations, leasing and property management; as well as mergers and acquisition opportunities, in order to add value until a full-fledged economic recovery resumes.

 

Posted on by Jacob Frydman in Commercial Real Estate Leave a comment

Welcome To The “#CRE Post” Blog

Greetings,

Commercial real estate and investing are the foundations of United Realty. Without large commercial properties and the people who invest in them, our company, staff and current roles in the real estate ecosystem would not exist.

Making the decision to blog on behalf of United Realty was not an easy one. The information we hope you find on this blog will need to be informative, relevant, professional, and most of all – consistent. These responsibilities fall on the shoulders of our staff and each other.

We look forward to sharing our commercial real estate insight and experience as well as our capital markets insight and experience with those who choose to read the blog. Expect to find our thoughts on industry transactions and trends, as well as what we believe the future holds with respect to what we specialize in. You will also find content related to our role as corporate citizens and the social responsibilities and charitable efforts that we hold close to our hearts.

We look forward to your comments and feedback. We hope that the #CRE Post results in sharing, learning, and turning online connections into offline relationships.

Thank you,

Jacob Frydman, Chief Executive Officer

Jacob Frydman

Posted on by Jacob Frydman in United Realty News 1 Comment