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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United Realty Launches Students Scholarship Program

At United Realty Partners we believe that we can invest in our future by investing in education, which is why we have recently launched United Realty Students.  Our scholarship program is awarding $100,000 to students over the next 12 months.

In recent years the cost of attending college has skyrocketed.  Bloomberg reported that the cost of tuition and fees has risen at a rate of 1,120% since 1978, four times faster than the increase of the consumer price index.  Also, CNN Money publishes that the cost of a four-year public college has risen 4.8% in the last year. While many factors have contributed to the rise of prices, the amount of students needing help to pay for higher education is rising too.

Students Scholarship

In the years to come these students will be running corporations, taking seats in government, educating the youth and many other jobs.  We believe that students are the key to our future and we must invest in them the same way we would invest in our personal portfolios.

As tuition costs have continued to raise so has the average amount of student loan debt students are graduating with.  Government aid, parents’ and students’ incomes have not increased in conjunction with the rising cost of tuition.  Students are more motivated to look for alternative ways to pay for their education.  Scholarships provide great opportunities for students as they are awarded and are not required to be paid back.

United Realty Students is providing students with multiple prizes, awarded every two months.  Investing is at our core of our beliefs and we would like to hear from students about their thoughts on investing.  Entry for the scholarship is for students to submit a short, original, previously unpublished written response to the scholarship question, “How Do I Invest In My Future?”  Students can win scholarships ranging from $5,000 to $10,000 — just by writing a response to this short essay. Scholarships will be awarded on an ongoing basis.  The first submission period has begun, and will run until March 1, 2013.

Click here to Apply.

Posted on by Eric Fischgrund in News, United Realty News Leave a comment

Recovery in Retail CRE Under Way, Proceed With Caution

It might not be ‘shop til you drop,’ but a recent report by commercial real estate services provider Cassidy Turley notes that the retail sector absorbed 3.1 million square feet in the first quarter, following a pace of 3.4 million square feet in the fourth quarter of 2011.

The pace over the last six months is five times faster than any point in the recovery cycle. Further, vacancy fell 10 basis points to 10.9% — the first decline in five years. Average asking rents, which have fluctuated in the past year, increased slightly in the first quarter of 2012 to $19.00 per square foot. Markets with the highest percentage of rental growth include Austin at 3.4%, Charlotte at 2.9%, Oakland-East Bay at 2.7%, and San Jose and Seattle at 2.6%. Manhattan claims the top per-square-foot rate with an average asking rent of $56.96.

“We may have a long way to go to reach what’s considered full recovery, but the U.S. retail sector also has made tremendous strides from our depths,” said Cassidy Turley’s Chief Economist Kevin Thorpe in their May 22 report.  We don’t see the middle-class consumer returning to its old spending patterns, much less the credit-fueled ‘aspirational shopping’ of the mid-2000s, for a number of years. This simply is not going to happen until the housing market recovers and much of the equity lost in the downturn is restored.”

Moreover, some investors remain cautious when it comes to retail CRE. Even through a recovery, given the long-term impact of online shopping on bricks and mortar, as well as the shopping habits of American consumers, one must be cautious about retail real estate.  The market is bifurcated, with high end luxury brand urban locations such as Fifth Avenue in New York, the Miracle Mile in Chicago and Rodeo Drive in Beverly Hills, continuing unprecedented increases in demand resulting in significantly higher rents, contrasted with an oversupply of suburban strip centers, which likely will be negatively impacted as consumers increase their online shopping trends.

First-tier shopping centers – those in vibrant urban markets or top suburban intersections or trade corridors – are posting marked improvement, with the highest rate of deal activity and, in most cases, rental-rate growth. Second-tier locations – shopping centers lacking strong anchors or not “on the main drag” – in the nation’s strongest market are generally posting rent growth as well. The trend is not replicated in weaker markets as third-tier shopping centers face challenges in nearly every market. This goes to prove again that real estate is all about location.

One of the most encouraging signs for the industry is that the era of massive big-box vacancies appears to be over, according to Retail Traffic Magazine. Several big chains stores including Ulta, Five Below, TJ Maxx, Ross Dress for Less, REI and Whole Foods have been snapping up those big-box vacancies, Thomas W. Gilmore, executive vice president with Los Angeles-based Madison Marquette, told the magazine recently.

“Landlords at high quality, well-located shopping centers no longer have to give in to tenants when it comes to rents. At those centers, the power equilibrium has returned to leasing negotiations. In the strongest markets in the country, landlords are even able to push rents,” Matthew K. Harding, president and COO of Levin Management Corp., told Retail Traffic.

That momentum is likely to continue as retailers try to gain a better understanding of their customers and real estate, marketing and merchandising departments interact with each other in order to make the best decisions on store openings.

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

Top 5 Biggest Commercial Mortgage Loans In NYC From January to April 2012

***This blog entry is a guest post from PropertyShark.com and contains data developed by their analysts. PropertyShark.com aggregates real estate data and listings from hundreds of public and proprietary sources into an easy-to-use yet comprehensive property research website covering a dozen major markets.***

A recent survey done by loan officers at Federal Reserve informs us that since the beginning of February 2012, banks — domestic banks in particular — have started to ease loan standards for the commercial real estate sector. At PropertyShark.com, we searched for the biggest five commercial mortgage loans in NYC from January to the end of April 2012 and compared them to the loans secured during the same period last year to see what the changes are.

The data shows that waters remained rather still this year except for two blockbuster loans in April. The rest of the loan activity stayed within last year’s patterns, when none of the commercial loans surpassed $175,000,000.

The biggest mortgage loan this year amounted to $520,000,000, with New York State Fund Housing Agency as lender. With it, real estate developer Gotham Organization is set to bring a change in the West Side’s residential landscape, as the massive housing project at 550 West 45th Street is expected to offer more than 1,000 affordable and luxury residential units at one address.

The second was secured against the 53-story tower at 1515 Broadway. Right before media giant Viacom paid a whopping amount to renew the lease of this entire building, the landlord, SL Green, obtained a loan of more than $320,000,000 from the New York branch of Bank of China. This is not the first mortgage SL Green, the largest office landlord in NYC, receives from the Chinese lender.

Are these two loans going to set a trend? It might be too early to tell, but they sure rocked the boat a little.

As a lender, Deutsche Bank has proven quite active during this time. In March 2012, it added to its lending books a $142,148,560 mortgage secured against the 7-story office building at 10 East 52nd Street, Manhattan, after one of its subsidiaries, the German American Capital Corporation, had financed in February a $125,000,000 loan going to The Solow Building in Manhattan.

Last year during the period January-April the highest mortgage loan was the $175,000,000 associated with The Milford Plaza Hotel in Manhattan. Foreign banks competed again with the domestic ones, Deutsche Bank appearing once more as one of the main lenders, with a $125,000,000 mortgage loan going to The Sheffield at 322 West 57 Street, one of the most sought-after condo buildings in Midtown Manhattan.

Here are the rankings for the highest commercial mortgage loans for January-April 2011 and 2012:

NYC Top 5 New Mortgages in January 2012-April 2012


 

 

 

 

 

 

 

 

 

NYC Top 5 New Mortgages in January 2011-April 2011



Posted on by Jacob Frydman in Commercial Real Estate, Guest Blog Post, Hotels, 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