Andrew Eaton

Apartment purchase prices are down compared to recent peaks…so why hasn't transaction volume picked up? Part of the reason is that, despite the recent decline in prices, they still remain meaningfully higher than they were pre-pandemic. In this latest post, I look at how price changes have varied between Class A, B and C units over the last four years. https://lnkd.in/giZwArcT

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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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good insight on Industrial

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I had a great conversation with Michael Bull, CCIM about the retail property market last week. Check out the recording here: https://lnkd.in/grHfbEXV #CRE MSCI Real Assets

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Sublease additions dropped significantly by over 40% year-over-year in Q1 2024. Growth-minded tenants are seizing the opportunity to acquire higher-quality spaces, with notable sublease transactions in the Bay Area and New York, including ByteDance’s163,000-s.f. sublease of Roku’s space in Silicon Valley. In Q2, the momentum continues with the New Jersey Institute of Technology securing a 75,000-s.f. sublease at 494 Broad Street in Newark. The demand for large-block, high-quality sublease listings remains strong, with limited availability as Carvana subleased more than 40,000 s.f. of its Marina Heights office campus to LPL Financial in April. Backfill activity is driving the decline in national sublease availability, which decreased by 2.6 million s.f. in Q1, now standing 16 BPS below peak sublease availability rates recorded in Q3 2023. #RealEstate #CommercialRealEstate #Sublease #MarketTrends

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NEPI Rockcastle has reported double digit growth in net operating income (NOI), up 9.4% on a like-for-like basis, with tenant sales having increased by 10% during Q1 2024 versus Q1 2023. All product categories recorded higher sales, except ‘Sporting Goods’ (-2.3%) with the best performing categories ‘Health & Beauty’ (+19%) and ‘Services’ (+18%). Fashion, the largest segment, saw sales increase by 9%: https://bit.ly/3UFjiMx #nepirockcastle #commercialrealestate #europe #realestateinvestment #propertyfund #realestatenews #propertydevelopment #propertyowners #landlords #retailrealestate #assetmanagement #shareholders #investorrelations #propertynews #poland #listedcompanies #JSE

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(Had to update and repost, since I mixed up the axis) Inventories are starting to accumulate this year, driving active listings above levels from 5-years ago in most large markets. Even so, most markets are still trending in a balanced range and prices are firm. Click below for interactive chart.

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Monday Market View Dashboards - For Lease - SoCal Markets SoCal Markets (OC/IE) - 30k -100k Sqft For Lease ➡ ~355 Prop/Spaces Available: - ⬆+5 from May ➡ $1.55psf Avg asking Lease Rate - ↕ No Change from May ➡ ~20.13m Sqft Available - ⬆ ~.31km sqft from May ➡ ~3.36m Sqft of Sublease - ⬆ +.06m from May ➡ 339.6 Avg Days on Market - ⬇ -4.7 Days from May 🔇 No Price changes as of the 3rd day of the month (June). 📢 30k-50k sqft (173) 48% & 50k-100k sqft (182) 51.3%. Check out the pie chart for size segment %'s. Top 3️⃣ Cities with the most product: Ontario, Santa Fe Springs, & Corona with Rancho Cucamonga a close 4th place. I believe there will be a big price delta between Class A and lower class product and locations. "Tides that raised all boats" (or properties) is gone, so value is the goal for tenants. They will seek out Class B & C to save on occupancy costs. Class A will be for tenants who demand that quality, but there will be some degradation in those rates as well. 🚀 Calling all tenants and lessors! If you're a tenant hunting for the perfect spot, now's the time to step up with a bold, aggressive offer. For lessors, it’s all about innovation to stay ahead – think smart, get creative with concessions and secure those leases before anyone else! Let’s make moves! 🏢✨ Cheers.....CJ

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On this episode of RealPage Economy Express, we delve into the latest economic data, shedding light on the robust job growth witnessed in March, persistent inflationary pressures, the mixed housing market picture, and the Federal Reserve's cautious stance on monetary policy. #EconomicTrends #RealPage #MarketAnalysis

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It's time to rethink how we handle the finances behind leasing deals and operations. Often, we see these as separate entities, but wouldn't a more cohesive approach serve us better? Consider the tenant, frustrated over maintenance woes. These might be on their tab, or perhaps they're significant enough to be building-wide concerns. Property Managers, in the meantime, are juggling their budgets, cautious about dipping into Tenant Improvement (TI) allowances or Capital Expenditures (CAPEX). The clock ticks, the issues linger, and we roll the dice, hoping the tenant overlooks the delay in exchange for future TIs to address these problems. But why this gamble? Why not have the Property Management proactively address these repairs, folding them into the OPEX and factoring them into the lease negotiations? Yes, there's a risk—the lease renewal isn't signed, and we're putting faith in the tenant's continued occupancy. But consider the payoff: securing a content tenant at market rates, maintaining the value and desirability of the property. If the tenant decides to move on anyway, that investment isn't lost—it's rolled into the appeal of the space for the next prospect, ensuring we don't just retain our current clients but attract new ones without overextending the operational budget. Let's align our financial strategies and keep our buildings, and tenant relationships, in top form

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Negativity sells. Gloomy real estate headlines flood YouTube, TikTok, Instagram, and X (formerly Twitter), spreading stories of bubbles, crashes, and price collapses. These channels, often lacking economic expertise, misguide many consumers, discouraging potential buyers for years. Many dream of a market crash to finally afford a home. The pandemic caused prices to surge, and then rates surged higher, sparking more negative narratives. Distinguishing fact from fiction in these headlines is challenging but crucial. The latest report does just that. Subscribe today for the full report that debunks the myths of the current housing market! Subscribe by visiting our website at www.ReportsOnHousing.com Our reports are designed to set expectations. Invest in your business and subscribe. It will help you close more deals.

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🚨 New Report Alert! 🚨 CoStar Group’s latest #Multifamily Market report for #Boise is out, and it’s a must-read! Currently, as most can see when they simply drive around, there is a supply “glut” that has been delivered, causing a rise in vacancy. With the current capital market restraints, however, this seems to be a trend that will be short lived. Historically, for context, an average of 980 units are built in Boise annually, but in the last three years a whopping 8,100 units have been delivered—a 25% inventory growth. However, forecasting shows rent growth on the horizon again as deliveries slow down.  In the last 12 months, 2,259 units were absorbed, a great sign from the low of Q2 23 at 1,137 units. As of Q2 24’, 3,039 units are under construction, increasing inventory another 7.6% locally. As vacancy seems to have spiked, projections estimate it will fall to around 7% by 2027. Rents have dropped slightly, at -0.5% over the last 12 months, and this has echoed national trends. As the Boise metro deals with deliveries and a currently higher vacancy rate, property managers are employing incentives to gather tenant attention. As Idaho is not a disclosure state, Costar’s data on sales and cap rates are limited. I believe that their estimates for cap rates in the mid-high 4’s are not accurate. However, the report nailed the fact that Idaho is still growing at an unprecedented rate and is now at nearly 2mm people! If you want to review the report or talk about Idaho’s #multifamily market, please let me know

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SRS' Matthew Mousavi, MBA recently spoke with PERE News about the state of the retail net lease market and the driving forces behind the slowdown of deal volume across all net lease asset types. "Occupancy rates are healthy, but the valuations are out of whack," says Mousavi. "Because we don't have a lot of distress, you don't see valuations going down, even though rates have gone up considerably. The market is inefficient now because it's frozen." Click the article to read more about the state of the retail net lease market ➡️ https://lnkd.in/gaxqvmCS #RetailInvestor #NNN #InvestmentSales #SRSCapitalMarkets #CapitalMarkets 

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Good news! Annual CPI #inflation was 3.6% in March quarter 2024, lower than the 4.1% annual rise in the previous quarter. This is the 5th consecutive quarter of lower annual inflation since the peak of 7.8% in December 2022 quarter. The most significant price rises this quarter were #rents (+2.1%), Secondary education (+6.1%), Tertiary education (+6.5%) and medical hospital services (+2.3%). So unfortunately our renters are still in dire times. How will this impact #cashrate? High chance we will see a hold, continuing from the current pattern. Inflation rate is not in the 2-3.0% target band just yet, which is most likely what the RBA need to see before any cuts. This means stability in household #budgets, creating a conducive base for more #realestate transactions.

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What is a cap rate, and why does everyone in real estate talk about them? When I transitioned from asset management (equities) to CRE, there was some new terminology I needed to learn. One of those terms was “cap rate”. A cap rate is basically the measure of risk of a real estate investment. There’s more to it than that, but that’s a very basic way to understand it. For example, if you’re looking at an investment with a listed cap rate of, say, 10%, that investment is likely more “risky” than a 5% cap rate deal. Generally, a better tenant with better credit will allow the owner to sell the property for a lower cap rate. These deals would be talked about saying “10 cap” or “5 cap”. How do you find a cap rate? NOI / Price = Cap Rate Cap rates aren’t fixed - a property that is listed as a 6 cap or an 8 cap doesn’t necessarily stay that way. An investor might find a deal they love, and offer high. StripMallGuy talked about this in his interview with Chris Powers. The offer might be viewed as a 4 cap by the sellers, because their NOI is low, and the investor is intending to raise the NOI. By raising the NOI, the investor can then sell the deal at a higher cap rate, but still at a profit. In the example that StripMallGuy gave, the investor offered a price that would be a 4 cap for the current NOI, but planned on increasing the NOI so that his price would really be a 12 cap. He turned around and sold it for almost $1m profit, soon after buying it. - - - - - - - - - - - - - - - - - - - Evaluate your deals well. Cap rates are only one tool to use, work with an advisor so that you can take advantage of great deals.

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