Why multifamily origination is down, and new interest in health care properties
Aug 8, 2014
Here are the news stories you might have missed this week:
GlobeSt.com: It is not your imagination: MF origination is down this year
Freddie Mac’s recent $1.2 billion K-Deal means more than just reaching an $80 billion landmark in total multifamily mortgages it’s securitized since 2009. The transaction is representative of a growing interest in floating rate loans from borrowers. The K-Deal also signals a decrease in multifamily origination, possibly due to pent-up demand for bonds. Yet some industry experts predict that originations will pick up again by the end of the year. Read more at GlobeSt.com.
The Business Journals Washington Bureau: Where’s construction headed? 5 insights from economists
Economists from building and construction trade associations discussed the outlook for the construction industry in a webinar on Monday. Although more jobs have been added to the market in recent months, experts claim the housing market won’t fully recover until wages grow. Businesses, however, are confident enough in market growth to start expanding facilities again, with commercial construction likely to increase by 10% this year. Click over to BizJournals.com to read more.
The Wall Street Journal: Property deal banks on health-care spending
In one of the largest health care real estate deals in recent history, NorthStar agreed to purchase Griffin-American Healthcare REIT II for $4 billion in a cash-and-stock deal. The acquisition reflects the increasing value of health care properties, mostly due to the growing population of older Americans. While yields shrank across most property types, the average cap rate for health care facilities fell to 6.82% this year, down from 7.18%. Learn more at WSJ.com.
The New York Times: In New Jersey, launching pads for same-day shipments
The New Jersey industrial market’s ready to build, even if tenants aren’t yet ready to lease. Twelve warehouses, totaling 5.17 million square feet, are under construction from Jersey City to Trenton, yet all but two have no confirmed tenants. But developers are not concerned. New Jersey’s central location, which puts it a day drive from 40% of the U.S. population, makes the state a coveted locale for the shipping industry. Plus, as more e-commerce businesses strive to meet demand for same-day shipping, the need for conveniently located warehouses continues to grow. Jump to NYTimes.com to read the rest of this story.
Houston Business Journal: New LEED certification requires more, but can pay off big
The Houston office market is taking the latest LEED update in stride. The new LEEDv4 adds two additional categories to its checklist: location and transportation. LEED boards will now factor in a building’s neighborhood walkability and access to public transportation when conducting a LEED review. The new categories might make achieving gold status slightly more difficult, but Houston developers agree that the certification is worth it in the long run. Although LEED-certified buildings cost slightly more to construct, they typically sell at a higher price, feature fewer vacancies, and yield a higher gross rent per square foot. Read more at BizJournals.com.
Author: Raymond T. Cirz