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

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RENT-ing is Sweet Music to Brooklyn Investors.

Real Estate NYCYou don’t need to have a Broadway hit to enjoy rent. Brooklyn is booming.

Although the American dream is still to own property, renting has taken off in the years since the Financial Crisis, especially in highly desirable neighborhoods like Brooklyn. That has caused a flurry of activity among commercial real estate investors looking to capitalize on rising rents and low financing. A recent report in the New York Times mentioned sale of 111 Kent Avenue in Brooklyn for $55.5 million, or more than $895,000 for each of 111 Kent’s 62 apartments. The NYTimes article goes on to mention that the price paid per apartment is a record for such properties outside Manhattan, according to the data company, Real Capital Analytics.

Steiner Studios recently acquired a 60-unit rental in the Carroll Gardens neighborhood of Brooklyn for $24.5 million, or $408,000 a unit, and is in contract to buy another rental building in the borough. Other big sales include Invesco Real Estate’s purchase of 75 Clinton in Brooklyn Heights for $50.8 million, or roughly $686,000 a unit. Invesco also bought the Arias Park Slope at 150 Fourth Avenue for $57.5 million, or roughly $605,000 a unit. Equity Residential bought 175 Kent Avenue in Williamsburg for $76 million, or nearly $673,000 a unit. The Naftali Group recently bought a vacant site at 267 Sixth Street in Park Slope that was intended to be a condominium and is instead building a 12-story, 104-unit rental building.

Reports point to several factors behind the trend, including a strong rental market and low interest rates. Rents in the borough increased by 10 percent in 2010 and were estimated to increase by 7 percent last year, according to a market report by TerraCRG.

Even those people who want to purchase a home are having difficulty obtaining a mortgage, according to The Times article. So they turn to renting instead. In addition to a strong rental market, Brooklyn is attracting waves of investors because of the many stalled condominium sites that are primed for conversions into rental buildings.

The Real Deal reports that studios have recently been heating up in the rental market. Previous months have shown that studios lagged behind the one and two bedroom categories for the month-to-month price change, but that is changing. Leading the way was Williamsburg with the highest monthly studio price increase.

Data from MNS shows that Boerum and Cobble Hill are listing rents that are about $100 less than last month. Although the discounts are primarily in walk-up buildings, renters looking for a hot location with a little sacrifice in luxury should hop the F/G trains and start looking. MNS reports that compared to last spring, Park Slope has achieved the highest year-on-year price increase of 33% in the borough. Two-bedrooms are up over $1,000 and new inventory, as well as rental product in condo buildings have pushed the rents up in the neighborhood.

 

Posted on by Jacob Frydman in News Leave a comment

Banks Compete For CRE Lending

According to a recent report from the CoStar Group, banks have picked up their lending activity to commercial real estate in recent months – a sign the slow-but-steady economic recovery is beginning to pick up steam.

The report says banks that are lending again see lower risk owner-occupied properties and multifamily properties as preferred targets. But with lenders focusing on the same ‘safe shelter’ property sectors, it is creating widespread competition for the better-quality borrowers in those areas. The real battle ground may be next year from the coming opportunities in construction and development lending.

“The area of lending that we see being the most competitive on pricing continues to be the commercial real estate arena, with a lot of players in and including the life insurance companies,” said Kirk W. Walters, senior executive vice president and CFO of People’s United Financial Inc., a bank holding company in Bridgeport, Connecticut.

Kelly S. King, chairman, CEO and president of BB&T Corp. in Winston-Salem, NC, told CoStar the competition is not yet so fierce that existing customers are getting picked off, but he did say banks are looking for more diversity as their own customer base is dwindling. Richard K. Davis, chairman, president and CEO of U.S. Bancorp in Minneapolis, MN, told the website the two coasts are where the activity is most competitive. And Joseph Ficarola, chairman, president and CEO of New York Community Bancorp, said that his $42 billion holding company in Westbury, NY, is only targeting the best borrowers.

In its quarterly survey of senior loan officers, the Federal Reserve found that business lending, or commercial and industrial loans, was enjoying increased demand – and greater competition among banks. The Fed reported that this was the second consecutive survey in which reports of stronger demand for such loans by domestic banks outnumbered reports of weaker demand. Reflecting this, commercial loans at commercial banks in the U.S. have risen about 15% between March 2011 and April 18, according to Fed banking-industry data.

Within this loan study, The Fed says most domestic banks generally reported having eased their lending standards and having experienced stronger demand over the past three months. Standards on C&I loans to large and middle-market firms, and to small firms, were about unchanged. However, moderate to large net fractions of domestic banks eased many terms on C&I loans to firms of all sizes, with most indicating that they had done so in response to more aggressive competition from other banks or nonbank lenders.

Domestic banks also reported an increase in loan demand from firms of all sizes. In contrast, a small net fraction of foreign respondents again reported a tightening of their lending standards on C&I loans and a decrease in demand for such loans. A moderate net fraction of domestic banks reported having eased standards for commercial real estate (CRE) loans. As has been the case recently, significant net fractions of domestic banks reported that demand for CRE loans had strengthened. On net, foreign branches and agencies reported that standards and demand for CRE loans were little changed.

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