Tom Noble

Mortgage rate ‘lock-in effect’ in Bay Area is more dramatic than anywhere else. These charts show the striking trend By Christian Leonard and Janie Haseman | April 20, 2024 Home buyers flooded the market in the early pandemic when mortgage rates hit record lows. But now rates are twice as high, leaving many homeowners stuck and fewer houses on the market. Since many homeowners currently have far lower mortgage rates than they could get if they bought a new house, many are reluctant to sell — a phenomenon housing experts call the “lock-in effect.” Nowhere in the United States is that effect as prominent as in the Bay Area. In the San Francisco metropolitan area, whose boundaries include Oakland and Fremont, the average mortgage rate in the last quarter of 2023 was 3.56% — less than half the average rate for new mortgages, 7.17%. For most of the last 25 years, interest rates on new mortgages were lower than the average rate on existing ones. That changed in 2022, with the gap widening even more last year. Those numbers are from a new research paper by economists from the Federal Housing Finance Agency, which found the lock-in effect makes moving homes much harder and contributes to rising home prices. The average mortgage rate among San Francisco metro area homeowners had declined steadily over the past two decades, since borrowers often refinance when rates drop far enough below their own. The gap between the average San Francisco metro homeowner’s existing mortgage rate and the rate they’d get with a new loan was 3.61 percentage points in late 2023, the second-biggest difference among U.S. metros behind the San Jose metro’s gap of 3.68 percentage points. That’s largely because both of those metro areas had the lowest average existing rates in the country at the end of last year, according to the study, which has not yet been reviewed by other experts. https://lnkd.in/g4zJAc_T

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Doing some field research for a multi-family build in Ebisu (not pictured). Like all resi in Tokyo these days, the projected cap rate is low under the normal, long-term lease model. Ebisu has maybe a handful of monthly, furnished apartments. The vast majority are tiny studio types, some as small as 12 ~ 15 m2. Ones marketed and accessible to foreigners are very few in number, and ones suitable for executives or families are almost non-existent. A major non-foreigner facing operator requires hand-written applications to be sent in by fax or scanned and emailed, then an approval process and contract documents to be faxed/mailed, signed and returned again… that should give you an idea of how archaic the local model is. But, finding a building for conversion is like finding a needle in a haystack. A building already tenanted under normal, long-term leases is going to take years to convert as you slowly wait for existing tenants to move out (tenancy laws mean that those leases perpetually renew for as a long as the tenant chooses). Vacancy rates on residential buildings, too, are extremely low in central Tokyo, so there aren’t many vacancies to begin with. And, if you’re the seller of a building, you typically try to fill it with tenants before going to market because buyers want tenanted properties.

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 Alice Leung is the Vice President for Platform and Product Strategy at Brick & Mortar Ventures. She began her career working on major construction projects in the San Francisco Bay Area, including UCSF Medical Center and Lucile Packard Children’s Hospital. During this time, she championed the use of construction technology to improve efficiency on project sites. Her experience working in the US and Singapore demonstrates her understanding of the construction industry on an international scale. On Wednesday 5th June, at Bricks & Bytes, we sit down with Alice for round 2! And we need your help. 𝐋𝐞𝐭 𝐮𝐬 𝐤𝐧𝐨𝐰 𝐲𝐨𝐮𝐫 𝐜𝐡𝐨𝐢𝐜𝐞 𝐨𝐟 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧 𝐢𝐧 𝐭𝐡𝐞 𝐜𝐨𝐦𝐦𝐞𝐧𝐭𝐬 𝐛𝐞𝐥𝐨𝐰 👇👇👇 QUESTIONS: A) What excites you most about the startups Brick & Mortar Ventures invests in? B) What surprised you most about the differences in the construction industry between the US and Singapore? C) Other (please post below)

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Inland Empire Industrial Real Estate Market Update June 2024 I recently had the opportunity to present our team's in-depth analysis of the Inland Empire's industrial real estate market this morning. Here's a comprehensive summary of the key insights and trends discussed during the talk: Leasing Trends: Market rents continue to decline as landlords offer lower rents or concessions. Leasing activity remains sluggish in the broader IEW market, with few tenants issuing RFPs for under-construction products or subleases. Big box 1,000,000 SF buildings in prime locations are still highly sought after. Future Projections: While it would be ideal for market values to increase, lease rates are expected to continue declining as long as vacancies remain elevated. Lease rates could fall another 10-20%, essentially returning to near pre-Covid values adjusted for inflation. Tenant Demand: Tenant demand has weakened after a surge of 3PL space absorption from 2020 to 2022. However, tenant activity has increased in the past 30 to 90 days, particularly in Inland Empire West, leading to signed leases. This activity to not substantial enough, and the credit profile of the tenant's robust enough, to warrant a trend but a positive signal. Transactions are also taking longer to finalize Sublease Inventory: The market has significant sublease inventory, with 25 million sq ft available in the IE. New construction completions are adding more supply, keeping vacancy rates high until the end of 2024 (or later). Market Disparity: Leasing in the Inland Empire increasingly requires a very micro perspective, with significant disparities in pricing, availability, and concessions depending on location, size, and vintage. The market sees most demand in the 100K and below and 700K and above segments, while the middle market size remains challenging. Sales Comps: Recent sales comps, primarily in the 5.00-5.25% cap rate range, provide invaluable data for market pricing sentiment. These comps generally reflect market rents with decent credit tenants. Land Values: There has been about a 50% decline in land values due. This suggests we are returning to a more "normal" market after the boom from 2020 to 2022. Optimism in Development: Despite challenges most reputable and long standing developers remain optimistic and are still pursuing new development projects in the IE. Equity and Debt: Renewed interest from LP capital to JV on development deals in IEW for larger size ranges (300K+ sq ft) and improving return-on-costs. Construction loans are gaining interest from debt funds and life insurance companies. Amazon: Last but certainly not leased (pun intended) is Amazon is back in a big way with the signing of 3, +1,000,000 SF buildings in May and June. We discussed the deal economics to try to parse through which was the best of the three deals from a deal economic perspective. Grant La Bounty, Chris Vassilian, and Will O'Neil

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SOLD | 2425 Grant Street | 10 Units | Under 1 Mile from UC Berkeley   My teams most recent closing... 2425 Grant Street, a 10-unit multifamily property nestled in the heart of Central Berkeley. Here are the key details:   Sale Price: $3.6 Million | $360,000 per Unit | $468 per Sq. Ft.   Unit Count: 10 units offering a mix of spacious 2-bedroom layouts and 1 studio unit.   Location Advantage: With its proximity to Downtown Berkeley & UC Berkeley, residents enjoy easy access to vibrant shopping, dining and entertainment options as well as world-class education, cultural events, and research opportunities.   Investment Potential: This property offers tremendous value and growth potential.   A heartfelt thank you to everyone involved in making this transaction a success.   My team currently has over $53 million in exclusive listings and nearly $190 million in off market opportunities available. If you have questions about this sale, want to explore your property’s market value, or have interest in purchasing real estate in the Bay Area, feel free to reach out to me, Keith Manson, or Mac Watson.   Keith Manson Zachary Greenwood Mac Watson #CBREEastBayMultifamilyTeam #MansonTeam #CBRE #CRE #CapitalMarkets #Multifamily #REInvestment #RealEstate #InvestmentProperties #CommercialRealEstate #BayArea #BayAreaRealEstate #EastBay #EastBayRealEstate #AlamedaCounty #AlamedaCountyRealEstate #studenthousing #CashFlow #BuildingEquity #Housing #MultifamilyInvesting #CaliforniaRealEstate #CBREMultifamily #CBRECapitalMarkets #HousingMarket #Investment #Lending #BayAreaMultifamily #Investors #CA #Markets #RealEstateMarket #Investing #Property #Apartments #ApartmentInvesting #ValueAdd

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Daily Discussion 💭#138: What are the Top 3 periodicals that you read on a frequent basis? For me, it’s the following: 1. Morning Brew - to get a flavor on what’s going on worldwide 2. CRE Daily - to track articles and major topics in CRE domestically 3. The Daily REITBeat - to understand the institutions (REITs) are up to since many folks like to follow the “leader” when it comes to investing Comment below with your Top 3 periodicals. Follow: #DailyDiscussion

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Cushman & Wakefield's Spring 2024 5-Year San Francisco Office Market Forecast. It's difficult to forecast the next year, let alone the next 5. Kudos to the Cushman & Wakefield Research Team for their excellent work - the best in the business. I have a few observations/comments: 1. Negative Deals. This is the market reality for many landlords. Rents in the $50s and $60s don't work well when the cost to build new space is ~$250/sf, typical operating expenses and taxes are ~$25/sf, commissions are ~$40/sf, and a 10 year lease will include 8 - 12 months of free rent. The net effect, before debt service, is a loss (a negative deal). 2. It's Happening. The long anticipated steep decline in rental economics is happening now. 3. Ghost Buildings. One factor keeping the market from falling even further (counterintuitively) is the presence of Ghost Buildings, buildings in which the landlord is only able to do transactions that require little or no capital - these assets become inactive in the market. 4. Overly Optimistic. Personally, I think the forecast is too optimistic. Demand continues to decline, causing negative net absorption, increasing supply. As leases expire, it's still typical for the next deal to be smaller (at least 30% smaller). From where we sit today, seems hard to believe demand will accelerate such that vacancy caps out at 36% and begins to decline in 2026. Further, I'm not sure a couple of point drop in vacancy which stands above 30% will be a catalyst for rent growth. #lowfogg #research #insights

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SOLD | 2425 Grant Street | 10 Units | Under 1 Mile from UC Berkeley My team and I are thrilled to announce the successful sale of 2425 Grant Street, a 10-unit multifamily property nestled in the heart of Central Berkeley. Here are the key details: Sale Price: $3.6 Million | $360,000 per Unit | $468 per Sq. Ft. Unit Count: The property boasts 10 well-designed units, offering a mix of spacious 2-bedroom layouts and 1 studio unit. Location Advantage: With its proximity to Downtown Berkeley & UC Berkeley, residents enjoy easy access to vibrant shopping, dining and entertainment options as well as world-class education, cultural events, and research opportunities. Investment Potential: This property offers tremendous value and growth potential. A heartfelt thank you to everyone involved in making this transaction a success. My team currently has over $53 million in exclusive listings and nearly $190 million in off market opportunities available. If you have questions about this sale, want to explore your property’s market value, or have interest in purchasing real estate in the Bay Area, feel free to reach out to me, Keith Manson, or Mac Watson. #CBREEastBayMultifamilyTeam #MansonTeam #CBRE #CRE #CapitalMarkets #Multifamily #REInvestment #RealEstate #InvestmentProperties #CommercialRealEstate #BayArea #BayAreaRealEstate #EastBay #EastBayRealEstate #AlamedaCounty #AlamedaCountyRealEstate #studenthousing #CashFlow #BuildingEquity #Housing #MultifamilyInvesting #CaliforniaRealEstate #CBREMultifamily #CBRECapitalMarkets #HousingMarket #Investment #Lending #BayAreaMultifamily #Investors #CA #Markets #RealEstateMarket #Investing #Property #Apartments #ApartmentInvesting #ValueAdd

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🏡 San Jose Real Estate Market Trends - Past 3 Years (Q2 2024) 🏡 San Jose's real estate market has seen impressive growth over the past three years. As of Q2 2024, the median sale price for single-family homes is $1,732,500, with properties selling in just 12 days on average. Condos and townhouses have a median sale price of $895,000, selling in 16 days. Curious about the latest trends and stats? Check out our detailed update. #SanJose #RealEstate #MarketTrends #HomesForSale #SiliconValley #RealtyNews DRE#01458118

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Summary of the 2Q 2024 Colliers Hawaii Oahu Office Report Market Overview Total Inventory and Supply: 🏢 Total office inventory in Oahu remains steady at 13.5 million square feet. 🚫 No new office supply has been introduced in recent quarters. Vacancy Rates: 📉 Vacancy rates have stabilized, with a slight increase from 13.56% in Q1 2024 to 13.57% in Q2 2024. 🔄 Over the past year, vacancy rates have hovered between 13.52% and 13.57%. Net Absorption: 📏 The market saw a marginal net loss of 1,406 square feet in Q2 2024. 📉 Historically, the market experienced a net loss of over 300,000 square feet in the past four years, but this was partially offset by approximately 800,000 square feet of office conversions. Office Market Trends Rent and Operating Expenses: 💵 Average office net rents have remained stable at $1.79 per square foot per month for the past six quarters. 📈 Building operating expenses have risen significantly, increasing from $1.41 to $1.60 per square foot per month over the past five quarters. Tenant Incentives: 🎁 Landlords are offering more aggressive incentives, such as increased tenant improvement allowances, free rent, and covering moving expenses to attract new tenants. Market Outlook Stabilization and Future Projections: 🔮 Despite challenges, there are emerging signs of stabilization in the office market. 🏢 Many tenants now have a clearer understanding of their space needs, leading to increased activity in the marketplace. 📅 Colliers expects significant changes in Oahu’s office market by 2025, with vacancy rates likely peaking near 14% by the end of 2024. 🔧 Conversion projects are ongoing, helping mitigate the impact of the shifting office market. Key Takeaways Economic Recovery: 📉 Oahu’s unemployment rate has dropped to 2.1%, marking its lowest level since the pandemic began. 📊 Over the past year, vacancy rates have stabilized around 13.5%. Market Equilibrium: ⚖️ The office market is anticipated to reach a new equilibrium by 2025 as conversion projects and tenant adjustments progress. Landlord Strategies: 🎁 Landlords are offering more aggressive incentives to attract tenants amid ongoing uncertainties. Conclusion 📈 The Oahu office market is showing signs of stabilization after years of disruption caused by the pandemic and shifts in work models. While challenges remain, particularly in the insurance market, the outlook is cautiously optimistic. Continued economic recovery and strategic adjustments by landlords and tenants are expected to drive the market toward a new equilibrium by 2025.

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At the close of the first quarter 2024, the Silicon Valley office market continued to display a measure of resilience amidst ongoing macroeconomic challenges and evolving trends in remote work. Despite recent economic uncertainties, Silicon Valley maintained the lowest office availability rate in the Bay Area, remaining relatively stable for the third consecutive quarter. Notably, there was a quarterly decrease in sublease availability, signaling potential market stabilization. The unemployment rate in Silicon Valley tracked above the national average, which had not been the case during the post-Global Financial Crisis (GFC) economic expansion, as Silicon Valley realized the impact of tech layoffs. Venture capital investment improved in the first quarter, undoubtedly driven by the recent surge in Artificial Intelligence. Santa Clara County tracked $4.47B of capital invested, the highest quarterly figure since the second quarter of 2022. There is measured optimism that the Fed will cut interest rates in 2024, potentially leading to further VC investment and tech industry growth in Silicon Valley. #commercialrealestate #colliers #siliconvalleyrealestate #siliconvalley #cre #officeleasing #sanjose #bayarearealestate https://lnkd.in/gGKFWtxB

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Ep. 116 - Mastering Family Real Estate Businesses: Operational Strategies and Generational Growth Watch the podcast here: https://lnkd.in/gMvg9Ump Join us for a riveting episode of Family Office Real Estate Insights as we welcome David Stanford from RealFoundations. In this episode, DJ Van Keuren dives deep into the challenges and opportunities faced by family-owned real estate businesses, from small startups to those in the midst of generational transitions and expansive growth. David brings to light the operational intricacies of running a real estate company, emphasizing the importance of an efficient operating model and platform. Key Highlights: Operational Efficiency: Learn about common pitfalls in technology adoption and the struggle to find a "magic solution" to operational issues. David discusses the complexity of managing multiple technologies and the need for a cohesive, streamlined operational platform. Generational Transitions: Gain insights into the challenges and strategies for navigating the shift from one generation to the next within family real estate businesses. The discussion delves into the aspirations for growth, the integration of third-party capital, and the evolution of business operations to meet the demands of institutional investors. Outsourcing Solutions: Explore the benefits of outsourcing various aspects of real estate operations, from back-office accounting and technology support to investor reporting and data management. David outlines how external expertise can accelerate business processes and alleviate the burden on internal resources. The Future of Real Estate Operations: Touching on the potential impact of AI and automation, David shares current applications and future possibilities for technology in streamlining real estate operations. The conversation also highlights the critical role of communication, change management, and strategic vision in driving business success. Whether you're part of a family-owned real estate venture looking to expand or modernize your operations, or simply interested in the dynamics of real estate business management, this episode offers valuable insights and practical advice from an industry expert. Discover how RealFoundations helps real estate companies run better, and learn strategies for embracing change and leveraging third-party expertise to your advantage. #familyoffice #familyoffices #foreinstitute #djvankeuren #familyofficerealestate #realestateinvesting #singlefamilyoffice #realestate

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We just reduced the price on our 7-unit listing in Pico Robertson, 1 block from Beverly Hills! Now with attractive Seller Financing available at 50% down, 4.5% interest for a 5-year term. Reach out to me or Michael Monempour for more info. #multifamily #realestate #realestateinvesting #apartments #cre #commercialrealestatebroker #commercialrealestate #1031exchange #propertyinvestment #investing #brokerage #california #investor #cashflow

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🏡 Sunnyvale Real Estate Market Trends - Past 3 Years (Q2 2024) 🏡 Sunnyvale's market has shown significant growth over the past three years. As of Q2 2024, the median sale price for single-family homes is $2,620,000, with properties selling in just 10 days on average. Condos and townhouses have a median price of $1,400,000 and sell in 13 days. The price per square foot has increased to $1,536 for homes and $981 for condos. Curious about the latest trends and stats? Check out our detailed update. #Sunnyvale #RealEstate #MarketTrends #HomesForSale #SiliconValley #RealtyNews CA DRE: 01932285

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