Lee Everett, CRE®

Appraisers in the U.S. need better tools that allow them to use more judgement in valuing assets. My colleague Willem Vlaming has been developing work showing that in parts of the world with low market liquidity and few comparable sales, that appraisal teams have been better able to capture the decline in asset values. http://ms.spr.ly/6040Yw5ts MSCI Real Assets #CRE

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The commercial real estate industry is anticipating a slightly smoother year ahead, according to a new survey of NAIOP members. The April 2024 survey found sentiment among the industry organization’s membership was favorable for the first time since the spring of 2022, indicating that respondents are anticipating conditions to improve for the industry in the next 12 months.It has been a challenging time for CRE. Deal volume plummeted in 2023, dropping by 51% compared to 2022’s transaction volume.Commercial foreclosures are up and, as of the start of the year, banks were expecting CRE losses to grow. April 2024 respondents had a positive outlook for every component that factors into the survey except for construction costs, which they expect to be higher next year, the survey found. Among areas where respondents expect improvement were the slight return of demand and deal volume. April 2024’s survey resulted in an index of 52. The previous survey reported an index of 46, while the two before that were 47. The most optimism ever captured on the index was an index of 57, in September 2018 and 2019.Respondents to the survey were predominantly working in the industrial and office sectors, as well as multifamily. #commercialrealestate #Commercialrealestateadviser #commercialproperty #creinvesting #cre #creindustrial #creoffice

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As the multifamily industry evolves, so must its approach to engaging residents on a personal level. Beyond mere information, residents and prospects yearn for meaningful connections and content that resonates personally: rptn.co/K8A6ZABAjHJ

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The #multifamily sector is experiencing several headwinds, including rising construction and operating expenses, a surge in new supply, rising borrowing costs and, in some cases, falling rental rates – but the outlook for 2024 may not be as black-and-white as it appears. Read more: https://lnkd.in/gSBWaxYA #CommercialRealEstate #CRE #RealEstateTrends

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CoStar reports, in Q1 2024, the U.S. multifamily market witnessed a strong resurgence in demand, absorbing 104,000 units—the highest figure since Q3 2021. Factors such as steady economic expansion and increased consumer confidence contributed to this rebound, prompting pent-up household formation. However, the market’s supply-demand dynamics remained imbalanced due to the completion of 140,000 new units during the same period. Although the vacancy rate rose by 10 basis points, it was the smallest increase observed recently, hinting at potential stabilization. Notably, rent growth seems to be recovering, with national annual growth reaching 0.8%. While most major markets are expected to return to positive rent growth in 2024, some may struggle to reach their pre-pandemic averages, particularly in Sun Belt regions. Read more: https://bit.ly/3QI6LqC #MarketRent #MultifamilyMarket #SunBeltRegions #RentTrends #RentGrowth

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CRE transaction volume was low yet again in the first quarter of this year. In terms of space transacted (rather than dollars), 1Q24 was slower than three out of four quarters from last year, an already depressed year in terms transaction volume. Prior to last year, the last time transaction volume was this low was in the second and third quarters of 2020 - the early, highly uncertain days of the pandemic when it was extremely difficult to get much of anything done. Before the pandemic, you'd have to go back to 2013 (for nonresidential properties) and 2010 (for multifamily properties) to see volume this low.   Read my latest article on First American's Econ blog to learn more about this very slow quarter, and why it's worth thinking about transaction volume in terms of space rather than dollars: https://lnkd.in/gA8g9kRH

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Seismic shifts anticipated for real estate industry's compensation landscape. In the wake of NAR’s settlement proposal, agents must chart a new way forward. In an ever-evolving real estate landscape, where markets fluctuate and dynamics shift, the role of a real estate agent transcends mere transaction facilitation. It encompasses a holistic approach to enhancing productivity, maximizing sales potential, and ensuring client satisfaction. In today’s competitive environment, staying relevant and agile is not just advantageous – it’s imperative. https://hubs.ly/Q02trv8H0 #RealEstateCompensationShift #NARSettlementImpact #ChartingNewCourse #AgentEvolution #CompetitiveAdvantage

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Rent growth continues in many secondary markets as shown in Yardi Matrix Special Report: Multifamily Rent Forecast Update   Heavy supply continues to weigh down asking rents in pandemic boomtowns. But many midsize markets in the Midwest, Northeast and South are still experiencing strong growth. https://lnkd.in/gGY35evi

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According to a new report from RealPage Market Analytics, markets for apartments in urban cores are catching up with their suburban competitors in terms of both occupancy and rent growth. Read on. #housing #multifamily

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What can Brown do for you? Sorry, I couldn’t resist, but if you are in retail or real estate, the answer is A LOT. I’m a 25+ year #cre #research #analyst and #commercialeealestate #economist that has specialized in #retailreakestate for the better part of my career. After a long journey in corporate real estate, I reunited with early friends and mentors at @gallellirealestate where I have been able to rediscover my entrepreneurial roots and launch the most comprehensive retail and reference guide to chains ever created. Something I have long dreamed of sharing with the market . That dream is #thebrownbook If there was ever anything that built my reputation in retail research it was knowing that knowledge of tenant plans and financials and their importance to gauging #shoppingcenter and retail health. As well as informing my team. Hockey great Wayne Gretzky once explained his success, “I go where the puck is going, not where it’s been.” That’s the basis of @TheBrownBook. A tool that helps you go where the puck is going to be and not where it was, in the fastest moving industry of all—retail. Now I am able to share with you all the culmination of my life’s work. All of my data gathering methods, connections, knowledge and endlessly hard work inform the data in #thebrownbook, the ultimate reference guide to retail tenants. An indispensable tool for #landlords, #developers, #investors, #tenants and #retailers (to know what their competition is up to), #facilitesmanagers, #appraisers, #media, anyone that needs solid #businessdevelopment tools that wants to know which #chains are growing, shrinking, new to market (you might not even know), or emerging. And who to call. Please check out samples of what The Brown Book contains. The Brown Book is not a book. It’s actionable knowledge for #businessdevelopment. https://lnkd.in/gTN-9qWT

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Here's a snapshot of the latest trends in the U.S. single-family rental market from CoreLogic's report: Overall Growth: Rent prices grew by 3.4% year-over-year in March. Segment Details: Low-end rents rose by 2.0%; high-end rents increased by 2.9%. Leading Markets: Cities like Seattle, New York, and Boston saw the highest growth, supported by strong job markets. Declines Noted: Places like Austin and Miami saw rent declines due to overbuilding. This gives a clear view of how rent dynamics are shifting across different regions and market segments. #RealEstate #RentalMarket #HousingTrends #MarketAnalysis #Colliers #Pittsburgh #MoreIn24 #ThriveIn25 #ClosersCoffee #ColliersCapitalMarkets https://lnkd.in/egECWSem

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Urban Land Institute and PwC: Real Estate Industry Poised for a “Reset” Another interesting finding is that there’s a shift occurring in how CRE portfolios are structured. As one respondent quoted in the report notes: “One thing that has evolved during this last period is how we think about the composition of a core portfolio and the definition of core.” Part of that pivot has been a move away from traditionally strong asset classes (particularly in the mall and office sectors) and towards more niche subsectors. Assets like data centers and medical offices, for example, have become an increasingly popular pick, along with cold storage, self storage, and student housing. Growth in Sun Belt markets is also anticipated to continue in 2024, despite signs of slowing in specific sectors. ULI states that out of the top 20 markets showing strong “overall prospects,” 15 are located within the Sun Belt. Read the entire article - https://ow.ly/4qMH50RkKFm

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According to a new report from RentCafe, between 2021 and 2024, the office-to-multifamily conversion pipeline swelled from 12,100 units in progress to well over 55,000. Read on. #housingmarket #housing #multifamily

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With NVDA stock split, there are lots of voices online saying things like "They're just trying to rip us off." But is that really the case? Let's look at the data before jumping to conclusions. As shown in the chart, with in the past 10 years, NVDA stock has gone through three recent growth phases. The chart shows monthly index data, with the horizontal axis representing months and the vertical axis representing the stock price as a multiple of its value at the start of the period. The current phase is shown by the blue curve, and we're currently in the 15th month. The previous growth phase lasted 28 months, and the one before that lasted 38 months. The current growth curve is closely matching the one before it. Using the 28-month duration of the last growth phase as a conservative estimate: - With a simple linear projection, the stock price at the end of this growth phase is expected to be about 5.6 times its value at the start, which would be around $155. - Using the curve from the previous phase, the stock price at the end of this phase could be about 8.4 times its initial value, which would be around $233. If we take a more optimistic view and use the 38-month duration of the phase before last, and use its growth curve for prediction: - The stock price at the end of this phase could be about 13 times its initial value, which would be around $360. So, the duration of the growth phase and the slope of the growth curve are really important. Right now, the growth rate is pretty much in line with the last phase, meaning it's growing quickly with acceleration, not just linearly. The big question is whether this phase can last as long as the 38 months of the previous phase. If it can, then the current stock price hasn't even reached halfway, and it would definitely be worth adding more to your holdings! What do you all think? How long will this current growth phase last? Leave your thoughts in the comments: (1) Less than 28 months, (2) 28-38 months, or (3) More than 38 months. #stockmarket #stockinvesting #usstock #nvidia #nvda #stocksplit #英伟达拆股 #英伟达拆股是割韭菜么

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Unfounded concern? This CoStar News article discusses non-traded REIT performance with a focus on Blackstone. It also raises criticism for lack of disclosure of NOI growth rates. I would argue NOI growth rate is not a valuation input, but a product of all other cash flow assumptions considered in conjunction with each other. While I do look at NOI growth as a metric, you have to have access to a whole host of other key assumptions to understand if the NOI growth makes sense. You can't glean this from financial statement disclosure. Even more convoluted when reporting on a portfolio basis rather than at the individual property level. Please know there is plenty of scrutiny on valuations from all the work Revantage, A Blackstone Portfolio Company (Blackstone's professional services co.) performs, their their-party valuation providers, valuation committee, and their external auditors. #RealEstateValuation #NAV #BDO https://lnkd.in/gDBhMa_7

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Family Offices Are Boosting Allocations to Alternative Investments (Private Equity, Private Credit, Real Estate) 1) In 2024, KKR’s survey of 75 family offices, 52 percent of their portfolios were to be invested in alts, up from 42 percent in 2022. The expansion is coming at the expense of all or most other asset classes. 2) Family offices, like other alts investors, think 2024 will be a standout vintage year. Interest rates remain higher and are expected to force distressed assets / companies to sell or recapitalize, even as the economic outlook improves. 3) “They understand the benefits the illiquidity premium plays in compounding capital in a tax efficient manner to build wealth for future generations,” Henry McVey, the head of global macro and asset allocation at KKR and the CIO of the firm’s $39 billion balance sheet. Read the full article here -> https://lnkd.in/gYbTjf8H #familyoffice #wealthadvisor #wealthmanagement #capitalallocation #alternativeinvestments #realestate #privateequity #privatecredit

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The ecosystem of opportunity. Where Darwinism and real estate intersect. If interest rates do not get cut soon, there will be more pain in the sector for those who were holding out for lower rates to start or refinance projects. The under-capitalized developers or sponsors who can't weather this financially will ultimately either need to sell to stronger sponsors or give keys back to the bank. It's sort of like a forest fire. It's very, very painful to watch, painful to live through, but it does regenerate the forest. So round and round we go. That starts the ecosystem of opportunity. This is where Darwinism and real estate sort of intersect...

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