The good times for commercial real estate are likely to keep going a little longer, according to experts surveyed for the latest Consensus Forecast survey from the Pension Real Estate Association (PREA).
Hang on tight—optimistic projections that apartment markets can absorb high levels of new construction are going to be tested soon. Developers will start construction on 405,000 units of multifamily housing in 2015, according to the 2015 Dodge Construction Outlook.
Multifamily REITs have lots of money from eager Wall Street investors, but it’s hard to find good opportunities to buy properties in core markets. Apartment REITs have been net sellers overall in 2014, though by a very small margin.
By at least one measure, the yield on investments in apartment properties still hasn’t matched the level of the real estate boom. That’s the “risk premium” that investors demand for apartments compared to Treasury bonds—a supposedly risk-free investment.
Borrowers have lots of choices as lenders make more and more capital available for commercial real estate, according to the latest report from the Mortgage Bankers Association (MBA), an industry organization.
Top analysts expect there to be a few more vacant apartments by the end of 2014, but strong demand will keep the percentage of vacant apartments compared to overall stock very low for a very long time.
Buyers continued to bid up commercial property prices this spring and summer, according to the latest round of commercial property price indices. But not every property type is gaining value in the same way. Many investors are broadening their horizons, looking beyond the most expensive properties and the safest core property markets as they hunt for higher yields.
Apartment buildings have a new way to show off how energy efficient they are: an Energy Star score from the U.S. Environmental Protection Agency. If the score is high enough, a building can even get an Energy Star plaque to go next to its front door.
When it comes to multifamily properties, it pays to go green, according to the latest research from Fannie Mae. The government-sponsored enterprise’s new report found a huge difference between the spending on utilities at the most efficient apartment buildings compared to the least efficient.