Eric Moser

“Extend and pretend” is the best way to describe what many of us are seeing with banks working with some borrowers to help avoid a bad situation. I am eager to see what happens in instances where an asset is under water at a depth where the waters can not recede. Some transactions should have been given complimentary life rafts because the “water’s edge” was lapping at their toes at the closing table. #multifamily #cre #commercialbroker #commercialrealestate

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Slowing #industrial construction activity will bring supply/demand back into balance in #SouthFlorida by 2025. In our latest article, CoStar Group data and expert commentary reinforce this view of a market recovery ahead. CoStar Group subscribers can click the link to find out more! #CRE #miamidadecounty #browardcounty #palmbeachcounty

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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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Urban Land Institute and PwC: Real Estate Industry Poised for a “Reset” Another interesting finding is that there’s a shift occurring in how CRE portfolios are structured. As one respondent quoted in the report notes: “One thing that has evolved during this last period is how we think about the composition of a core portfolio and the definition of core.” Part of that pivot has been a move away from traditionally strong asset classes (particularly in the mall and office sectors) and towards more niche subsectors. Assets like data centers and medical offices, for example, have become an increasingly popular pick, along with cold storage, self storage, and student housing. Growth in Sun Belt markets is also anticipated to continue in 2024, despite signs of slowing in specific sectors. ULI states that out of the top 20 markets showing strong “overall prospects,” 15 are located within the Sun Belt. Read the entire article - https://ow.ly/4qMH50RkKFm

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Cost of Office Build Outs 2024: ◾ Average office build out cost up 2.7% YOY for a moderate style of medium quality finishes (small to medium size workstations, fewer than 20% offices and a 70/30 split between office/workstations and collaborative space ◾ An increase, but significantly less than the double digit increase over the last two years ◾ Average cost across US & Canada is $264/SF; compared to $257/SF in 2023, $233/SF in 2022 and $190/SF in 2021 ◾ Atlanta Cost PSF: $226 in 2023; $237/SF in 2024; YOY Change 4.87% Jesse Whalen, Commercial Real Estate Tenant Rep Advisor Michael Bull, CCIM CoStar Group #officeconstruction / #commercialrealestate / #CRE / Bull Realty Link in comments

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The April MSCI sales update from Colliers reveals the weakest sales month in 2024, influenced by a rise in the 10-year Treasury. Multifamily remains the top asset class, while hospitality saw a 98% year-over-year volume surge. Office and industrial sectors experienced declines, and retail showed signs of stabilization despite an 11% drop from last year.

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JLL Clean Energy & Infrastructure Advisory experts Kristy David and Robert Anderson spoke with Independent Banker about the need for private financing alongside public funding to modernize U.S. infrastructure. Read more at the link. #Infrastructure #InfrastructureSpending #InfrastructureFunding

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Some Investors Say CRE Could Be Close To Bottom: 1Q 2024 ValTrends Report   Adversity continues to buffet commercial real estate (CRE), including high interest rates, constrained capital availability, conservative underwriting standards, low deal volume and negative returns. But some investors believe CRE is close to the bottom, according to the latest ValTrends report, “In the Crosscurrents,” SitusAMC’s quarterly analysis of important trends in the economy, CRE sectors, capital markets and the investment environment. Download free, 28-page report for 1Q 2024 now. https://lnkd.in/gQCr-bsn

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As the industrial market slows down it isn't surprising to see Prologis forecast less demand as vacancy rates begin climbing nationally. The industrial market saw unprecedented rent growth since the start of the pandemic but that was an unusual set of circumstances unlikely to be completed. Overall, the industrial market is healthy and not overbuilt in most markets. Here in South Florida we have a wave of new product delivering over the next few quarters which will push the average vacancy rate a little higher and even though deal velocity has slowed, the long term demand for industrial space is more than likely. #JLLindustrial #warehousing #logisticsproperties

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The Long-Term Pull of Smaller Markets: A Hines Exec Weighs In Will Renner discusses the company’s push into secondary and tertiary Midwest locations. In times of economic hurdles that have permeated all sectors of commercial real estate, investors and developers are increasingly turning to previously overlooked smaller markets to stay active or even grow. And coastal areas and the Sun Belt are not the only regions they’re willing to deploy their capital in. Secondary and tertiary markets in the Midwest are bringing forth a set of advantages that have the potential to alter the way investors look at new ventures. One of the companies looking to capitalize on these benefits is Hines, which has recently announced a concerted push into the Midwest. We asked Senior Managing Director Will Renner to talk about the company’s decision to expand to Oklahoma and Northwest Arkansas, and also touch on why smaller markets are poised for growth in the long run. What was behind your decision to pursue new opportunities in these secondary and tertiary markets? Renner: In addition to Hines’ broader analysis, I have personally followed both markets for many years and noticed the growth and economic trajectory of the two regions, especially as we worked on our first projects in those areas. We recognized that Hines could further build on the legacy of the Devon Energy Corp. Headquarters—also known as Devon Tower—in Oklahoma City and of Crystal Bridges in Bentonville, Ark., and invest across product types in a more meaningful way. Both projects were pivotal in shaping and cementing our investment strategies for these areas … More specifically, the long-term bet on smaller, dynamic markets is a salient strategy given current living patterns and preferences. From a personal standpoint, I recently moved to Tulsa, Okla., because my wife is from Tulsa and we were attracted to the quality of life, business-friendly environment and wide-open spaces in the area. In many ways, my own family is a case study on why many people are choosing to move to these markets—you can keep the big-city job and live a small-city life. It’s not for everyone, but we enjoy it. https://lnkd.in/gmYcn-dk

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Estimating construction costs is probably one of the hardest parts of underwriting a deal. The first hard part is figuring out what needs to be fixed, and the second hard part is estimating the costs. One of my favorite tools for a first-pass guess is EstimateON (https://www.estimateon.com). It's not flashy, but the data is solid.

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📊🌆 The annual total of multifamily permits issued in the top 10 metros reached 151,650 as of April, about 25% less than the 203,060 issued in the previous 12 months and down approximately 2.5% from March. #MultifamilyHousing #RealEstateTrends #HousingMarket #Construction

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Three Takeaways from the Brooklyn Industrial Market in Q1 1. Dollar Volume Rebound Q1 recorded $190M in total dollar volume, marking a 56% increase from Q123, and a 15% increase from Q122. This metric serves as a barometer of institutional confidence in NYC and the economy. While uncertainties in the economy persist, stable interest rates over the past 7 months have allowed investors to be more confident in their underwriting, facilitating larger transactions. 2. User is King Last year, 84% of the transactions were acquired by users. In Q1 this trend continued with 69% of all transactions being bought by users. For sellers navigating today’s market, cooperation with brokers, exposure, and excellent marketing materials are paramount! 3. The Buyer Pool Under $5M is Insatiable Deals under $5M saw a record sales price per SF of $521 in Q1. Service-based businesses are willing to pay substantial premiums for vacant warehouses, driving prices higher in this segment. While the premium persists above $5M, it is not as strong as the sub-$5M market.

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When people ask me why now is the golden window to buy multifamily? Here are a couple of compelling reasons: · Supply-Demand Discrepancy: A significant disconnect exists between supply and demand, promising continued strong absorption and rental dynamics. · Homeownership Cost Barrier: With homeownership increasingly out of reach for many, there's a growing renter pool, further bolstering the rental market. · Bond Market Dynamics: While bond markets are relatively high (at least for this decade) pricing reflects this state. Anticipated interest rate cuts could tighten spreads, potentially boosting investment values. · Buyer's Market Advantage: Presently, it's a buyer's market, offering less competition and more unique opportunities. · Inflation Hedge: Commercial real estate remains as an attractive option for investors seeking to outpace inflation and build long-term wealth.   As noted by experts from Blackstone, investing during periods of uncertainty can yield immense upside. “You want to be investing into this dislocation because there's a lot of uncertainty. When that uncertainty passes, those investments begin to deliver accelerated return.” While deals may be challenging in today's market, the potential upside CRE is unprecedented. For those with a long-term outlook, there's arguably never been a more exciting time to enter the nipsey hussle marathon than today. https://lnkd.in/e6FfhsH4 #greysteel #cre #blackstone #realestate #multifamily #investing

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ICSC's latest newsletter about the Co-Tenancy retail lease clause paraphrased: Amid the shifting dynamics of retail leasing, traditional co-tenancy restrictions wielded by anchor tenants have lost their once firm grip. In the early 2000s, an oversupply of retail space tilted the balance of power toward retailers, but today's landscape tells a different story. Notably, restrictions have relaxed, allowing for a broader range of tenants such as gyms, boutique fitness studios, entertainment venues, medical facilities, and co-working spaces. This shift reflects the changing retail environment, marked by subdued construction activity and a focus on reinvigorating struggling retail assets. Landlords now find themselves in a position of strength, with increased bargaining power. To adapt, landlords are renegotiating leases to accommodate evolving tenant needs while safeguarding the shopping center's character. This involves granting waivers for tenants falling within certain categories, such as medical services, and refining language to address specific concerns. The retail industry's evolution demands a more nuanced approach to co-tenancy restrictions, as yesterday's threats may no longer hold true. Anchors, recognizing the need for diverse traffic generators, are driving discussions on what types of tenants attract visitors to shopping centers. While concerns about parking congestion persist, landlords and tenants are finding compromise by locating parking-consuming uses strategically within the property. Flexibility is key in this evolving landscape. The definition of anchors has expanded beyond traditional retailers to include restaurants, gyms, and public spaces. Although some leases still prohibit certain uses, there's a growing willingness to negotiate waivers to foster mutually beneficial relationships between landlords and tenants. However, negotiations can be complex, often involving trade-offs such as reduced rent or term extensions. Interpretation of lease language and evolving trends, such as the rise of entertainment concepts like escape rooms and virtual reality venues, further complicate matters. Looking ahead, emerging trends like pickleball and the legalization of marijuana pose new challenges and opportunities for landlords. While these trends may reshape the retail landscape, uncertainties remain, particularly regarding regulatory changes and market acceptance. In summary, the retail leasing landscape is undergoing a profound transformation, driven by shifting consumer preferences and market dynamics. Adaptability and collaboration between landlords and tenants are essential to navigate this evolving terrain successfully.

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The new supply being delivered in Philadelphia has catalyzed some of the most explosive asking rent growth that we've seen in recent history. New construction simply needs to be in the $4.00+/SF range in order for yields to pencil in our market, and most pro forma rents are being pushed even further by construction cost overages and extended carry costs due to delays. Pre pandemic, very few buildings eclipsed the $3.50/SF mark throughout the entire city. We now have a plethora of $5.00+/SF projects. This has surpassed what I thought was imaginable for our market in a very short period of time. Effective rents are dampened by concession at the moment, but with the supply faucet shutting off at the end of 2025, capping the remainder of the "Abatement" projects, effective rents will catch up quickly. The top end of the market has done wonders for older vintage deals as well, as they draft behind the growth. The Philadelphia Multifamily market will continue to be on every top 10 list for rent growth moving forward, willing to bet on that. #philadelphia #philadelphiamultifamily #multifamily #investmentsales #realestate #multifamilyinvesting #realestateinvesting #cushwake

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This is interesting development. Say half of these projects move forward to actual conversions and that each building has an average RBA of 200,000 that's 9.4 million square feet of office inventory removed from the supply / demand matrix. Now say that the occupancy of these buildings is 50% and they move elsewhere that absorbs 4.7 million square feet. So this would move the needle to the tune of 14.1 million square feet. It sounds like a lot of inventory being removed from the supply / demand matrix, but there is currently 97 million square feet available. So these conversions would lead to 14.5% less space available. The $64,000 question is, how do we reduce the available space by another 20-30 million square feet. The long and short answer IMHO is economic growth in NYC; which will lead to more businesses being formed and more demand for office space. Let me know if your firm needs help navigating their next office real estate transaction. Michael Adler 212-519-2046 #cre #commercial #commercialoffice #commercialrealestate #commercialofficebuilding #commercialdevelopment #commercialleasing #office #officebuilding #offices #officebuildings #officelease #officeleasing #tenant

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Commercial Real Estate knowledge also comes from expertise. With years of experience in the commercial real estate industry, I've developed a deep understanding of the intricacies of the market. From zoning regulations and legal considerations to financing options and property management best practices, I leverage my expertise to guide clients through every step of the process. Ready to tap into industry expertise over a cup of coffee? Let's chat! Whether you're navigating the market or seeking insights into commercial real estate intricacies, I'm here to help. Reach out today to schedule a coffee meeting and explore how we can turn your real estate goals into reality. #marketexpertise #commercialrealestate #investments #generationalwealth #industryexpertise

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