Student Housing Is Booming

Investors are snatching up more student housing properties than ever before. “Last year was the biggest year ever, investment sales-wise,” Fred Pierce, president and CEO of Pierce Educational Properties, told the National Real Estate Investor. This year is on pace to be even bigger. 

Investors have purchased more than $3 billion in student housing properties from the start of 2016 through mid-May. That is up from $2.1 billion over the same time period in 2015. 

“Interest in the student housing sector is as high as it’s ever been and is increasing,” says Doug Opalka, senior managing director for Holliday Fenoglio Fowler. 

Student housing apartments buildings students

One recent mega deal comes from a partnership of institutional investors – including the Canada Pension Plan Investment Board, GIC and The Scion Group – which is about to close a $1.4 billion deal to buy University House Communities Group Inc. The company owns 13,000 student housing beds. 

“That is going to create additional investment sales,” says Pierce, adding that big portfolio sales often lead to spin-off transactions. 

What’s more, the private fund manager Harrison Street recently acquired Campus Crest for $1.9 billion. Campus Crest owned 38,000 student housing beds. 

Student housing is typically viewed by investors as a stable investment with consistent yields and a sector that tends to be more resistant to any economic downfalls, according to National Real Estate Investor. 

We at Landmark Group are here to help you with any real estate need – buying, selling or renting residential, retail, office, wholesale or industrial property. We can also help you maintain, renovate or manage your property. Just give us a call.

 

Posted in Apartment buildings, Apartment houses, Apartments, Education, Housing, Student housing, Students - Housing | Leave a comment

Retail Market Remains Rife with Contradictions

Lower vacancy rates, little new construction and weak rent growth mark today’s commercial real estate market. The historically low levels of available space are sparking a slow return of new construction, though cautious developers remain picky about location,CoStar reports. 

The economic forces of creative destruction have been hard at work in the U.S. retail market. The sector has been a case study in contradictions, marked by the growing demand from an emerging set of new retailers that have added hundreds of new stores across the country, even as many established chains in the old order scale back, close stores or go bankrupt.  

Looking at the national retail occupancy numbers, one would consider the recovery in the retail property sector to be complete. Retail vacancy rates across the country are well below those of the previous cycle and continue to trend lower. Shopping centers and malls absorbed another 25 million square feet in the second quarter, more than double the new retail space added to the market during the same uyear-ago period, according to CoStar’s Midyear/Second Quarter 2016 Retail Market Review and Forecast.  

Commercial real estate United States Real Estate property

Yet the tepid rate of rent growth, which has has held stubbornly at about 2.8% annual growth since 2014, has kept retail bottled up as the last CRE property sector still shy of its pre-recession rent peak. 

One nagging factor in retail’s ongoing store closures, which have been rising again since the beginning of the year following lackluster holiday sales. Most recently, Office Depot disclosed it has added 300 more stores to its store closure list set to shutter by 2019. They are in addition to the 400 stores already slated to close this year as part of cost-cutting move following its failed merger with Staples. The Sports Authority bankruptcy and closures by Sears and other department stores have left vacancy holes in many shopping centers.  

Casualties in the apparel sector have also plagued landlords. Luxury brand Coach will shutter 250, or 25% of its North American stores. In June, Ralph Lauren announced the closing of 50 stores across the U.S. Japanese apparel maker Uniqlo has scrapped its second American expansion, closing five stores.  

Despite this, the U.S. retail vacancy rate shrunk to 5.7% in the second quarter of 2016, its lowest level since the recession in 2007, thanks to robust expansion by trendy food stores and all types of restaurants.  

“From a high-level perspective, the fundamentals outlook indicates the market is quite healthy,” said senior real estate economist Ryan McCullough, who joined Suzanne Mulvee, director of U.S. Retail Research for CoStar Portfolio Strategy, in presenting the second quarter and midyear update.  

We at Landmark Group are here to help you with any real estate need – buying, selling or renting residential, retail, office, wholesale or industrial property. We can also help you maintain, renovate or manage your property. Just give us a call.

 

Posted in Commercial real estate, Commercial real estate--United States, Real Estate, Real property | Leave a comment

Developers Look to Older Generation

Demographic trends dictate that demand for senior living accommodations is on the rise. Studies show that by 2060 there will be about 98 million Americans age 65 and above. That’s more than double the corresponding population today, according to the U.S. Department of Health and Human Services.

 

Real estate investment brokerage Marcus & Millichap’s first-half 2016 senior housing report said private equity investors have spent billions of dollars on senior housing properties. The report said returns on those investments are “holding steady in the mid-7 percent area. That’s more than triple the highest-yielding Treasury bonds available today.

 

The older population is growing faster in the Omaha area than nationally. The nation’s over-55 population is projected to increase about 62 percent from 2010 to 2040, the same population in a five-county Omaha area is to jump 83 percent, according to data from the University of Nebraska at Omaha’s Center for Public Affairs Research.Apartment buildings Apartments Multifamily housing Real Estate Rental properties Senior market

 

At the same time, data shows the younger population between 24 and 55 years old is to increase only by about 26 percent in the Omaha area and 15 percent nationally.

 

To meet current and future demand, developers already have built, are working on or plan to build numerous senior focused living units across the Omaha metro area. Project locations include Aksarben Village, Hillsborough, Sterling Ridge and other sites across the metro.

 

The new senior-oriented housing ranges from apartment rental units to owned townhomes. Services range from simple living to assisted living to full-time care.

 

The multitude of projects involves tens of millions of investment dollars, thousands of new units and thousands of jobs to build and operate the facilities. It’s a huge financial boon to the community as it prepares to house its aging population far into the future.

 

We at Landmark Group are here to help you with any real estate need – buying, selling or renting residential, retail, office, wholesale or industrial property. We can also help you maintain, renovate or manage your property. Just give us a call.

 

Posted in Apartment buildings, Apartment houses, Apartments, Multifamily housing, Real Estate, Rental properties, Senior market | Leave a comment

Some Wonder If Apartment Market Slowing

Rents are climbing and construction of new multifamily units spiked over the past five years. The apartment market has been golden, but some investors are starting to wonder if the sector is showing some signs of slowing.

 

The apartment market “is increasingly jittery over supply, absolute rent levels, asset pricing and the potentially wobbly employment backdrop,” David Toti, a REIT analyst with BB&T, said recently in a note to investors.

 

Equity Residential recently revised its outlook lower for the apartment market. It recently had exited the Florida market and now has a bulk of holdings in San Francisco and the New York City area.

 

“Clearly 2016 will not turn out to be the year we had originally expected due to deteriorating market conditions in San Francisco and New York City, which combined made up 50 percent of our initial growth forecast for the year,” Equity Residential CEO David Neithercut said on a quarterly earnings call last week. “These markets have turned to become quite volatile.”

 

Instead, markets that they hadn’t expected to give them the most growth – Boston, Washington, D.C., Seattle and Southern California – are performing better, Equity Residential notes. They say that oversupply has become a big problem in some markets.

 

AvalonBay, which holds a mixture in higher-priced markets and close-in suburbs, also is concerned the market is softening. “This trend appears to be largely demand-driven as economic and job growth fell short of expectations for the first half of the year, and declining business confidence and investment no doubt was a contributing factor as recent uncertainty and global events have left businesses hesitant to make new commitments,” AvalonBay CEO Timothy Naughton said on the company’s earnings call last week.

 

Rents are still rising across the country. However, more landlords are offering concessions. For example, AvalonBay offered renters four times the monetary concessions in the second quarter compared to a year ago, CNBC reports.

 

Also, commercial lending has tightened lately with loans getting smaller. That will constrict construction and lead to a more balanced market on the high end, CNBC reports.

 

We at Landmark Group are here to help you with any real estate need – buying, selling or renting residential, retail, office, wholesale or industrial property. We can also help you maintain, renovate or manage your property. Just give us a call.

 

Posted in Apartment buildings, Apartment houses, Apartments, Real Estate, Rental properties | Leave a comment

A Peek at the Not Distant Future

This week, we are taking a look at the world of tomorrow. Massive changes are in store in the not distant future.

Posting on WorldHealth.com, Dr. Robert Goldman, M.D., PhD., offers some exciting and sometimes frightening insight into what lies ahead for mankind.

In 1998, Kodak had 170,000 employees and sold 85% of all photo paper worldwide. Within just a few years, their business model disappeared and they went bankrupt. What happened to Kodak will happen in a lot of industries in the next 10 years – and most people don’t see it coming. Did you think in 1998 that three years later you would never take pictures on paper film again? Digital cameras were invented in 1975. The first ones only had 10,000 pixels, but followed Moore’s law. So as with all exponential technologies, it was a disappointment for a long time, before it became way superior and went mainstream in only a few years.

Now the same thing is happening with Artificial Intelligence, health, autonomous and electric cars.

Software will disrupt most traditional industries in the next 5-10 years.

Uber is just a software tool, they don’t own any cars, and are now the biggest taxi company in the world. AirBnB is now the biggest hotel company in the world, although they don’t own any properties.

Artificial Intelligence: Computers are becoming exponentially better in understanding the world. This year, a computer beat the best Go player in the world, 10 years earlier than expected. In the US, young lawyers already don’t have jobs. You can get legal advice (more or less basic stuff) from IBM Watson within seconds, with 90% accuracy compared with 70% accuracy when done by humans. So if you study law, stop immediately. There will be 90% fewer lawyers in the future, only specialists will remain.

Watson already helps nurses diagnose cancer, four times more accurately than human nurses. Facebook now has a pattern recognition software that can recognize faces better than humans. In 2030, computers will become more intelligent than humans.

Business Cities Growth Computer software Intelligent agents Real Estate Surgical technology Transportation Automotive Urban

Automatic cars: In 2018 the first self driving cars will appear for the public. They will be mainstream just two years later. Around 2020, the complete automobile industry will start to be disrupted. You won’t want to own a car anymore. You will call a car with your phone, it will show up at your location and drive you to your destination. You will not need to park it, you only pay for the driven distance and can be productive while driving. Our kids will never get a driver’s licence and will never own a car. It will change the cities, because we will need 90-95% fewer cars for that. We can transform former parking space into parks. Each year 1.2 million people die in car accidents worldwide. We now have one accident every 100,000km (62,000 miles), with autopilot driving that will drop to one accident in 10 million km (6.2 million miles). That will save a million lives each year.

Business Cities towns  Growth Computer software Intelligent agents Real Estate Surgical technology Transportation Automotive, Urban I

Cities will be less noisy because all cars will run on electricity, which will become incredibly cheap and clean. Most car companies might become bankrupt. Traditional car companies try the evolutionary approach and just build a better car, while tech companies (Tesla, Apple, Google) will try the revolutionary approach and build a computer on wheels. A lot of engineers from Volkswagen and Audi are terrified of Tesla.

The real estate business is bound to change. Because if you can work while you commute, people will move further away from their job sites.

Learn much more about tomorrow at:

http://www.worldhealth.net/news/predictions-technology-health/

Meanwhile, if you are seeking today’s opportunities in real estate, we at Landmark Group are here to help you find them. We can help you with any real estate need – buying, selling or renting residential, retail, office, wholesale or industrial property. We can also help you maintain, renovate or manage your property. Just give us a call

Posted in Business, Cities and towns - Growth, Computer software, Intelligent agents (Computer software), Real Estate, Software, Surgical technology, Technology, Transportation - Automotive, Urban transportation | Leave a comment

Profits Climb for Office Market Landlords

Office vacancies dipped below 16 percent nationally in the second quarter of 2016. This marks the lowest vacancy rate since the recession began seven years ago, according to new data released by Reis Inc. That bodes well for landlords of office buildings who are seeing demand high and profits rising. 

In the Omaha metro area office vacancy rates are below the national average, ranging from 13 percent downtown to just 4.6 percent in the suburban West Dodge corridor. 

“Large, name-brand firms are opening new offices in primary and secondary markets, trying to tap into new talent pools,” says Julia Georgules, vice president of JLL research. “In some places, the high-demand urban core is becoming too expensive, and tenants are looking for fringe areas.” 

More than 100 million square feet of new construction is in the pipeline nationally, but that has softened rents. Office rents rose 1 percent in the second quarter over the first quarter, Reis reports. About 65 percent of the new supply has been focused on just 10 markets, such as Dallas/Fort Worth and Southern California, Georgules notes. 

“Occupancy growth is just trailing new supply,” Georgules says. “A lot of tenants want to wait until more supply comes in, so you have developers breaking ground speculatively based on strong market fundamentals.” 

Investors still see big potential with office properties. For 2016, employers are on track to hire 2.1 million workers. Also, office properties are the only major commercial property type that has yet to regain its prior peak pricing, according to a report by Marcus & Millichap. That report and one by JLL predict that office rents will rise nearly 4 percent this year, and the vacancy rate will drop by 30 basis points this year. 

As such, landlords likely will continue to find big returns in the office market well through 2017 in most areas, while then stabilizing by 2018, according to JLL. 

If you are seeking opportunities in real estate, we at Landmark Group are here to help you find them. We can help you with any real estate need – buying, selling or renting residential, retail, office, wholesale or industrial property. We can also help you maintain, renovate or manage your property. Just give us a call.

 

Posted in Business, Commercial real estate, Office buildings, Real Estate | Leave a comment

E-Commerce Creates Bull Market in Warehouses

With Amazon and other e-commerce sites continuing to take market share from brick and mortar retailers, U.S. mutual fund managers are upping their bets on an overlooked part of the online shopping boom: warehouses.

Real estate investment trusts (REITs) own the distribution centers required to fill all those Amazon Prime boxes and these REITS are a growing favorite on Wall Street after two years of underperformance compared with the broad real estate market.

The move comes about largely because of changes in the supply chains of online retail giants like Amazon.com over the last few years as they focus on fast, two-day shipping.

A traditional retailer might send a pallet full of merchandise to a store, but online shippers send out individual packages. That requires significantly more space to hold greater amounts of inventory on hand and to route all those boxes, said Eric Frankel, an analyst at research firm Green Street Advisors.

That has allowed companies such as Prologis Inc  – which counts Amazon among its largest customers – to raise rents a record 20.1 percent in the first three months of the year. Even with the rent increases seen this year, warehouse occupancy rates are at their highest since 2000, making rent spikes across the industry likely for newer, modern warehouses near major cities, according to Green Street.

“We think the shift to e-commerce is just going to create more demand for warehouses and while those aren’t the sexiest parts of the industry, that’s where the demand is,” said Nate Weisshaar, a portfolio manager at Motley Fool Asset Management. He has been adding to his position in Stag Industrial Inc., a warehouse company whose shares are up 24 percent year-to-date.

Total fund ownership of real estate companies such as Prologis Inc and Duke Realty Corp has jumped by 30 percent or more over the last quarter, according to Morningstar data. At the same time, their share prices are up 15 percent or more for the year to date, well outpacing the 3-percent gain in the benchmark S&P 500, or the 9.9-percent increase in the Dow Jones All REIT index.

Whether you are considering investing in a warehouse or prefer other types of real estate, we at Landmark Group are ready to assist you. We can help you with any real estate need – buying, selling or renting residential, retail, office, wholesale or industrial property. We can also help you maintain, renovate or manage your property. Just give us a call.

Posted in Commercial real estate, Industrial property, Nebraska Real Estate, Warehouses, Warehouses - Management | Leave a comment

Looking for Opportunities?

Investors are always looking opportunities to make money. Some want homes to renovate and flip, others want homes to hold as rental properties. Some would like to have the income stream from a strip mall, apartment building or commercial building.

For me, the dream is historical structures that allow me to fuse retail and residential in overlooked downtown neighborhoods. I purchased a historical structure in a rough area around 24th & Leavenworth and am in the process of creating retail bays and apartments. I also bought a commercial building and parking lot across the street, along with two more nearby vacant apartment buildings and a nearby corner store that I hope to redo and fill with a trendy motor scooter business. I also have a nearby warehouse where I am trying to lease office space.

It’s going to take around $15 million to get these projects up and running. And I am still hoping to buy more nearby properties.

?????????????

My Landmark Group is just one of a number of local investment groups puttiing together multiple parcels and neighborhoods to better control, brand and transform older pockets of Omaha into the next hot spots for shopping, dining, living or all three.

It’s more economical to renovate in bulk and to provide services such as security and maintenance to contiguous rather than scattered properties. That critical mass of activity also can fuel momentum. It just makes a lot of sense controlling the neighborhood, you can get things done, move the needle easier.

kitchen slide 2

Well Grounded coffee shop opened last year in one of my buildings. Tastes of Soul Cafe will open soon. I’d love to get more restaurants going; that would really change things down here. An antique store is open in another of my buildings.

?????????????

My vision is to infuse a dynamic kind of feel with a dense mix of retail and residential uses. I know the Leavenworth corridor is scary to many, as homeless and transient people often loiter. There isn’t much  parking near my apartment buildings, and I am counting on most of the tenants being mass-transit users.

Renovation of the Anderson building is complete, and tenants are beginning to move in to the 28 market-rate apartments there. Rents range from the $600s for a micro-unit to the $800s for larger apartments.

Whatever your real estate investment dream, we at Landmark Group are ready to help. We can help you buy, sell or rent residential, retail, office, wholesale or industrial property. We can also help you maintain, renovate or manage your property. Just give us a call.

Posted in Apartment buildings, Apartment houses, Apartments, Apartments in Omaha, Business, Cities and towns - Growth, City planning, Commercial Property Management Omaha, Financing, Landmark Group, Multifamily housing, Multifamily Investing Omaha, Nebraska Real Estate, Omaha Commercial Real Estate, Paladino Development Group, Property Management Omaha, Real Estate, Real Estate Expert Omaha, Real Estate Investing Omaha, Real Estate Omaha, Rental properties, Restoration Omaha | Leave a comment

Online Fraud Worries Property Managers

The increase in online rental applications has raised concerns about identity theft and online fraud among property managers, according to the results of a new survey by TransUnion of 163 property managers who manage more than 500 rental units nationwide.

 

More than 56 percent of property managers surveyed say they’ve seen an increase in online applications in the past year. Nearly 70 percent of respondents reported concerns about identity theft and online fraud. Nearly four in 10 property managers surveyed say they are not confident about the accuracy of residents’ application information.

Rental Application pic

“In today’s online and mobile era, residents expect quick approvals and smooth application processes, but property managers must remain cognizant of the potential fraud threat,” says Mike Doherty, senior vice president of TransUnion’s Rental Screening Solutions Group. “Online rental application fraud is a growing problem. In order to quickly approve good residents, property managers must arm themselves with solutions that provide greater certainty and verify identities online and detect potentially fraudulent applicants.”

?????????????

 

Property managers ranked income and employment information as the most important techniques for screening prospective residents, followed by criminal background checks, rental and eviction history and credit history, according to the survey.

 

“Credit history, prior rental payments and other screening techniques allow property managers to make smarter and better objective decisions on leasing to prospective residents,” says Doherty. “As an emerging issue in the multi-family industry, property managers should pay additional attention to their online fraud and identity theft protocols to protect their business while allowing strong applicants through the rental application process faster.”

 

If you are considering investing in real estate, we at Landmark Group are ready to assist you. We can assist you with any real estate need – buying, selling or renting residential, retail, office, wholesale or industrial property. We can also help you maintain, renovate or manage your property. Just give us a call.

Posted in Apartment buildings, Apartment houses, Apartments, Attitudes, Electronic commerce, Internet fraud | Leave a comment

Apartment Development, Demand Spreads to Suburbs

While the development boom in core apartment and condominium submarkets has garnered most of the headlines, developers have actually delivered more than twice as much new multifamily supply in the suburban markets.  

Several executives of large publicly traded apartment REITs spoke of a shift of development out to the suburbs during quarterly earnings conference calls with analysts over the last couple of weeks.  

“We think that the suburbs might have missed some of the new supply over the last several years, but will get their fair share going forward,” said David Neithercut, president and CEO of Equity Residential Trust (NYSE: EQR).  

Apartment buildings houses Apartments Business Cities planning Construction industry Market Metropolitan areas Multifamily housing Real Estate

As new apartment supply peaks amid steady job growth, market mix and price points will be important for apartment operator UDR Inc., which has a diverse portfolio spread across 20 urban and suburban markets, President and CEO Tom Toomey noted.  

For example, UDR’s Seattle assets posted 8.4% revenue growth in the first quarter and “continue to benefit from the strong growth inherent in our suburban class B assets, which are located in submarkets that are less exposed to new supply,” COO Jerry Davis said.  

While the suburbs may be a good spot for investors and owners in 2016 and 2017, “after that, I would suspect that they are going to start seeing the same supply pressures that we are seeing in some of the urban markets today,” Toomey added.  

Like the office market, non-core, mainly suburban apartment inventory constitutes the overwhelming majority of stock at 9 million units, compared with 1.5 million core units. More than 140,000 units of non-core units were built in 2015, more than twice the 65,000 units that delivered in high-density, mixed-used neighborhood areas last year.  

While supply expansion has driven up vacancies in suburban markets as well, with the 113,000 new units delivered last year to be joined by another 207,000 units under construction in the suburbs, vacancies should remain lower in the suburbs compared with secondary core areas, CoStar senior economist Ethan Vaisman said. 

If you are considering investing in real estate, we at Landmark Group are ready to assist you. We can assist you with any real estate need – buying, selling or renting residential, retail, office, wholesale or industrial property. We can also help you maintain, renovate or manage your property. Just give us a call.

 

Posted in Apartment buildings, Apartment houses, Apartments, Business, Cities and towns - Growth, City planning, Construction industry, Market conditions, Metropolitan areas, Multifamily housing, Real Estate, Rental properties, Suburban homes | Leave a comment