Nearly 52% of young adults, ages 18-29, are living at home with their parents. That’s the largest percentage since the Great Depression. The COVID-19 Pandemic is to blame, says a recent Pew Institute Research study. This information, has many investors and players in the multifamily sector hedging their bets to see this pandemic housing situation […]
We continue to operate our office and are actively performing site inspections and delivering reports to our clients. We are also accepting new jobs and will be here to serve you in the days and weeks ahead. We realize that this situation is ever-evolving and are implementing a number of strategies that will allow us to continue to deliver reports and perform inspections in our local Kansas City community and nationally for the foreseeable future.
We are taking the necessary steps while performing site inspections to keep our consultants and our clients’ on-site personnel safe and in compliance with social distancing guidelines. We realize that we may need to re-evaluate or adjust some of our practices as the situation evolves. If you have any standards in place we should be aware of, please let us know and we are happy to accommodate.
Communication is crucial during this time. We have always taken an approach to open communication lines with our clients during their inspection and report process. We continue to put this into practice as we move forward to conduct business and deliver our environmental and engineering services with as limited interruption as possible, while ensuring we’re keeping our staff, our clients’ staff and the public safe during this unprecedented time.
Adaptive reuse projects is the process of taking old buildings or sites, and reusing them for a purpose other than it was designed.
Analyzing the practicality of a property is crucial to determine the viability of all real estate investments. The feasibility process has to be more intensive for adaptive reuse because of the stand out difficulties of repurposing an existing property. Considerations like…
What we mean by this is to look back to learn from the past. Are there any unsolvable issues that were already faced. Are there boundary or easement challenges, historical preservation ordinances, or even legacy environmental issues?
Something to reminisce on for industrial properties… is there a free and clear use for construction and zoning approval? Industrial use challenges are more complex in regards to environmental remediation and these challenges affect both regional and national markets and local.
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admin2020-11-18 09:37:552020-11-18 18:39:58ULI Sets Forecast for a Potential 2021-2022 Rebound
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admin2020-02-11 22:22:132020-02-11 22:22:13MBA CREF 2020 Recap
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Mollie Beck2020-01-09 18:49:582020-02-09 18:51:00Advice on Avoiding Issues with the ADA
Nearly 52% of young adults, ages 18-29, are living at home with their parents. That’s the largest percentage since the Great Depression. The COVID-19 Pandemic is to blame, says a recent Pew Institute Research study. This information, has many investors and players in the multifamily sector hedging their bets to see this pandemic housing situation […]
We continue to operate our office and are actively performing site inspections and delivering reports to our clients. We are also accepting new jobs and will be here to serve you in the days and weeks ahead. We realize that this situation is ever-evolving and are implementing a number of strategies that will allow us to continue to deliver reports and perform inspections in our local Kansas City community and nationally for the foreseeable future.
We are taking the necessary steps while performing site inspections to keep our consultants and our clients’ on-site personnel safe and in compliance with social distancing guidelines. We realize that we may need to re-evaluate or adjust some of our practices as the situation evolves. If you have any standards in place we should be aware of, please let us know and we are happy to accommodate.
Communication is crucial during this time. We have always taken an approach to open communication lines with our clients during their inspection and report process. We continue to put this into practice as we move forward to conduct business and deliver our environmental and engineering services with as limited interruption as possible, while ensuring we’re keeping our staff, our clients’ staff and the public safe during this unprecedented time.
Adaptive reuse projects is the process of taking old buildings or sites, and reusing them for a purpose other than it was designed.
Analyzing the practicality of a property is crucial to determine the viability of all real estate investments. The feasibility process has to be more intensive for adaptive reuse because of the stand out difficulties of repurposing an existing property. Considerations like…
What we mean by this is to look back to learn from the past. Are there any unsolvable issues that were already faced. Are there boundary or easement challenges, historical preservation ordinances, or even legacy environmental issues?
Something to reminisce on for industrial properties… is there a free and clear use for construction and zoning approval? Industrial use challenges are more complex in regards to environmental remediation and these challenges affect both regional and national markets and local.
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admin
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admin2020-11-18 09:37:552020-11-18 18:39:58ULI Sets Forecast for a Potential 2021-2022 Rebound
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admin2020-02-11 22:22:132020-02-11 22:22:13MBA CREF 2020 Recap
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Mollie Beck2020-01-09 18:49:582020-02-09 18:51:00Advice on Avoiding Issues with the ADA
MBA Vice President of Commercial Real Estate Research Jamie Woodwell expressed his opinion for the sector at the MBA Commercial/Multifamily Servicing & Technology Conference.
“We’re currently in the longest economic expansion ever,” Woodwell said. “There have been a couple negative quarters here and there, but not two in a row, which is the definition of a recession. So there’s been an incredibly long run of economic expansion.“
Woodwell quoted multiple record-setting metrics: Commercial property cap rates are at record lows; MBA accounted a record $574 billion in multifamily and commercial mortgage bankers originations last year; plus loan delinquency rates are at or near record lows.
“So, there are a lot of phenomena going on, putting us in a place we’ve never seen before,” Woodwell said. “Thus, the question becomes what’s next?“
That answer is dependent on your outlook on life.
People on the optimistic spectrum may say they don’t see anything likely to change the current thriving situation. While others may say, “it’s been a great run, so I’m going to get ready for what comes next,” Woodwell said.
Woodwell used the first quarter’s 3.2% real GDP growth rate to back the current strength of the U.S. economy. Unemployment rate dropped to its lowest point in 50 years and job growth has averaged above 200,000 per month thus far in 2019. “That’s boosted wages, which economists had expected would happen well before now,” said Woodwell.
On the other end, our economies great performance could guide some inflation pressure. “But that has not yet materialized,” Woodwell said. “Some think trade tariffs could start to bring more inflation on.”
Multifamily sector: Moving fast in terms of both supply and demand for apartments. The younger generation is filling the shoes of their parents, which supports high demand for multifamily properties. The main surge is in Millennials since they’re beginning to demand apartments and form households; mainly high-quality urban newly developed apartments.
Office sector: Shows a long steady run of positive job growth, but on the flip side, companies are using a smaller space per employee; which leads to the recent fairly stable market. Nevertheless, wage pressure increases while employers struggle to keep their top employees in the middle of an extended strong job market.
“One tool employers could use would be to reverse the recent trend of shrinking office space and increase the room given to employees in an effort to compete for talent,” he said.
Retail sector: Definitely has witnessed the largest changes, mostly due to E-commerce, which has taken over almost 10% of all retail sales and persists to grow 3 basis points each quarter.
“But consumer consumption is strong enough that both E-commerce and brick-and-mortar stores can grow–as long as consumer spending continues, Woodwell said. “But if consumer spending should slip, which will lose more?,” he asked.
Industrial Sector: Has experienced positive evolving changes that have rarely been seen in the past such as new warehouse properties with a second or third story. With manufacturing shipments and E-commerce growing at record highs, the industrial sector continues to thrive–and evolve.
“When I think about what’s likely to happen, I come back to the idea of a plateau,” Woodwell said. “Coming off a record year of originations, I don’t see much pulling those numbers down, and I also don’t see much pushing those numbers much higher, so we generally see a plateau for originations for the next few years. If we continue to run at this level, that still means growth in mortgage debt outstanding because of maturities, and that means there will likely be more need for servicers like you to service these loans.”
Need help with any Commercial Real Estate transactions?
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admin2021-01-18 20:34:112021-01-18 20:34:11Kansas City Development Landscape Still Booming!
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admin2020-11-10 18:29:142020-11-18 18:34:12Medical Office Buildings a Safe Haven Asset During Uncertain Times; Physician Practices Still Struggle
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admin2020-02-11 22:22:132020-02-11 22:22:13MBA CREF 2020 RecapOpportunity Zones are economically-distressed communities where new investments, under specific conditions, might be eligible for preferential tax treatment. Districts are eligible to be Opportunity Zones if they have been submitted for that classification by the state and that submission has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service.
Opportunity Zones serve as an economic development tool. Furthermore, they are modeled to stimulate economic development and higher the job rate in distressed communities.
No, they were added to the tax code by the Tax Cuts and Jobs Act on December 22, 2017. The first set of Opportunity Zones, covering sections of 18 states, were selected on April 9, 2018. Opportunity Zones have now been appointed covering sections of all 50 states, five U.S. territories and the District of Columbia.
A Qualified Opportunity Fund (QOF) is an investment vehicle that is designed as either a partnership or corporation for investing in qualified property that is in a Qualified Opportunity Zone.
They are designed to boost economic development by providing tax benefits to investors. First off, investors can postpone tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026. If the QOF investment is held for more than 5 years, there is a 10% exclusion of the postponed gain. If held for longer than 7 years, the 10% becomes 15%. Next, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is qualified for growth in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.
The answer is no. You may get the tax benefits, even if you don’t work, live or have a business in an Opportunity Zone. You just need to invest a recognized gain in a Qualified Opportunity Fund and elect to defer the tax on that gain.
Definitely. This list can be found at Opportunity Zones Resources and in the Federal Register at IRB Notice 2018-48. In addition, a visual map of the census tracts designated as Qualified Opportunity Zones can be found at Opportunity Zones Resources.
Yes, this list can be found at Notice 2018-48.
Absolutely. A LLC that decides to be treated as a partnership or corporation for federal tax purposes can classify as a Qualified Opportunity Fund.
An eligible partnership or corporation self-certifies by filing Form 8996, Qualified Opportunity Fund, with its federal income tax return. Early-release drafts of the form and instructions are posted, with final versions due in December. The return with Form 8996 has to be filed timely, taking extensions into consideration.
Check out this article for more details on Opportunity Zones.
The Treasury Department and the Internal Revenue Service will be giving more details, including further legal guidance, on this new tax benefit.
Our Chief Marketing Director, Jamie Taylor, is a proud member of Commercial Real Estate Women (CREW) which is an industry networking organization. And according to a recent study published by CREW, women are advancing in commercial real estate, especially in the C-suite, and the shrinking salary gap. However, there are still areas for improvement to get more women intrigued in CRE brokerage, less of an income gap, and leasing and sales positions.
“This type of progress comes with lessons learned early on. The first few years of a career can be pivotal to future success. Whether it is mastering the art of negotiation, relationship building, or finding your voice, these years can make or break any career. Three women shared what they learned that helped them reach the success they have today and make their lessons work for them.“
-Maryann Reid, Forbes Articles
Advice given by Angele Robinson-Gaylord, President: IKEA Property, Inc.
Advice by Robin Kennedy, Executive Vice President, Acquisitions & Development: Montage International
Lesley Horton Campbell, Associate General Counsel: Tiffany & Co.
Need help with environmental consulting? UES Consulting and our broad team of inspectors are skilled in the demands of commercial and multi-family transactions. We know how in-depth and time-sensitive Phase I Environmental Site Assessments and Property Condition Assessments are and we can help the process go smoothly and finish on time.
If you are looking for a company to partner with on your commercial real estate transactions of any kind, we are here to alleviate the weight of environmental issues and minimize risks.
In Freddie Mac’s Multifamily research, they found that “performance in the multifamily market remained healthy during 2018, despite high levels of new supply entering the market. We expect this trend to continue into 2019, but with more modest growth in comparison to recent years.”
2018 ended up with solid rent growth and only modest increases in vacancy rates despite an elevated level of new supply. There are some weakness’s in individual markets and submarkets.
“New supply will remain elevated through 2019 and into 2020 but rents and vacancies will continue outperforming historical averages due to robust demand related to the rising cost of homeownership, changing demographics and consumer preferences.”
Cap rates have slightly fallen over the past couple quarters but they expect cap rates to rise in 2019 if Treasury rates increase.
“Multifamily origination volume is projected to grow to $317 billion in 2019 driven by solid market fundamentals and strong investor demand for multifamily properties.” This figure exceeds 2018’s statistic by 3.9 percent.
In conclusion, “we expect 2019 to be another strong year for the multifamily industry. Homeownership affordability constraints and consumer trends will continue to drive demand, while strong rent growth will support property price growth.”
For full analysis click here.
