Limon Net Lease Group

Archives for August 2021

Q3 2021 Multifamily Market Report | NYC Metro

by

Manhattan Renters Returning After Year Away; Construction Keeps Pressure on Class A Units

  • Metro exiting challenging period. While fewer people left New York on a net basis in 2020 than in any of the previous three years, many residents did relocate out of Manhattan.
  • Outer boroughs performing well, construction a concern. Most submarkets outside Manhattan posted sub-3 percent vacancy in June, with some areas such as Southeast Brooklyn and Ditmas Park-Flatbush staying under 2 percent.

Investment Highlights

  • The number of properties that changed hands in the first six months of 2021 was up by about 9 percent from the second half of 2020.
  • Over the 12-month period ending in June properties traded at an average per unit price of $339,900, down 3 percent from the 2018 peak.
  • Sales activity was up across all five boroughs over the past four quarters, with the largest jump occurring in Queens.
  • Manhattan buyers targeted the Upper West Side most often, with numerous century-old properties with fewer than 20 units.

* Forecast; ** Through 2Q
Sources: CoStar Group, Inc.; Real Capital Analytics; RealPage, Inc.

Download the Full Report Here

The information contained in this report was obtained from sources deemed to be reliable. Every effort was made to obtain accurate and complete information; however, no representation, warranty or guarantee, express or implied, may be made as to the accuracy or reliability of the information contained herein. Note: Metro-level employment growth is calculated based on the last month of the quarter/year. Sales data includes transactions sold for $1 million or greater unless otherwise noted. This is not intended to be a forecast of future events and this is not a guaranty regarding a future event. This is not intended to provide specific investment advice and should not be considered as investment advice. Sources: Marcus & Millichap Research Services; Bureau of Labor Statistics; CoStar Group, Inc.; Real Capital Analytics © Marcus & Millichap 2021 | www.MarcusMillichap.com

Eviction Moratorium Report | August 2021

by

Eviction Pressures Abating as Economy, Labor Market Continue to Improve

  • Rising infections prompt moratorium extension. On Aug. 3 the Centers for Disease Control and Prevention enacted a new order halting residential evictions in counties with substantial or high levels of COVID-19 community transmission.
  • Federal aid and job growth lower eviction pressure. Contrary to initial expectations, rent collections have held up fairly well during the health crisis.
  • Multifamily sector performing well. Rental demand has already recovered substantially from last year, with a record number of apartments absorbed in the second quarter.

Additional Factors:

  • Court backlog may provide time for aid to arrive. Congress has allocated close to $47 billion in rental assistance, with $25 billion released so far, but the rollout has been slow.
  • Estimates of renter hardship likely skewed by statistical issues. Some higher-end estimates of rent delinquency have come from the Household Pulse Survey, a recent experimental dataset.

Download the Full Report Here

Investor Sentiment Survey Results | 2021 Second Half

by

New Investor Sentiment Survey Results for 2H 2021:

Strong Sentiment Points to Positive CRE Outlook

  • Investor sentiment remained stable at 165, in-line with pre-pandemic levels; above 140 from this time last year
  • About 74% of respondents say their properties are performing at or better than pre-COVID levels
  • Half of respondents plan to increase their CRE holdings as values are expect to rise for all property types

Economic Recovery Expected to Drive CRE Appreciation

  • Seniors Housing expected to see largest YOY gain at 7.5% due to a post-pandemic occupancy recovery
  • Industrial benefited from rise in eCommerce and “Just In Case” inventory; investors anticipate 7.4% price growth
  • Apartments, Self-storage, and Hotels also expect strong gains; driven by rent growth and economic recovery

Potential Headwinds Could Reshape CRE Landscape

  • Changes to tax law, rising interest rates and elimination of 1031 Exchanges remain top investor concerns
  • Despite elevated uncertainty, investor sentiment remains higher than 4 out of the last 5 years

As of 2H 2021
Base: All respondents; bases vary by property type currently invested in.
Sources: Marcus & Millichap Research Services, M&M/WMRE Investor Survey

Watch the Video Below

How Does the Labor Shortage Impact Real Estate?

by

Will the labor shortage impact Commercial Real Estate?

Job Openings Overtake People Looking for Work

  • Job openings in June reached record 10M – Previous peak was 7.6M in 2018 under tight labor market
  • Roughly 1.4M more jobs available than people looking for work, despite unemployment rate still at 5.4%

Labor Shortage Drag on Economic & Real Estate Recovery

  • Some tenant types, like Retail, Hotels and Sr. Housing, unable to hire enough staff to operate at full capacity
  • Labor shortages stifle economic growth – Slows demand for Retail, Industrial warehouses, Offices and Apartments
  • Construction worker shortage could limit new supply; would benefit performance of existing real estate

Labor Imbalance Could Present New Headwinds

  • Competition for talent contributing to rising wages; May further fuel inflation
  • Rising inflation could force the Federal Reserve to tighten monetary policy sooner than expected

*Job openings through June; Unemployed through July
Sources: Marcus & Millichap Research Services, BLS

Watch the Video Below

2H21 National Single-Tenant Net-Leased Retail Outlook Report

by

Low Bond Yields and Elevated Inflation Risk Invigorate Buyer Interest in Net-Leased Assets

  • Demand for single-tenant properties to last beyond health crisis. Most of the traditional users of net-leased retail space weathered the pandemic better than many sectors of the real estate market.
  • Retail sales well above pre-pandemic levels. Single-tenant retailers continue to benefit from the influx of stimulus capital pumped into the economy in the wake of the health crisis.
  • Labor shortage hamstrings some sectors. A few states with stringent lockdowns may see restaurant closures near 33 percent, while others may only experience 10 percent losses.
  • Reopening to support single-tenant retailers. As workers return to offices, more visits to single-tenant facilities will aid in retail sales at stores near offices and other establishments that rely on commuters.

Click Here to View the 2H21 National Single-Tenant Net-Leased Retail Outlook Report

*Forecast | Sources: Marcus & Millichap Research Services; CoStar Group, Inc.; Real Capital Analytics, Capital Economics; Freddie Mac; Moody’s Analytics;
Mortgage Bankers Association; National Association of Realtors; National Association of Home Builders; BLS; Federal Reserve; RealPage, Inc.; U.S. Census Bureau; Wells Fargo

Follow Jesse Limon CRE on Twitter

Follow MMREIS on Twitter

National Retail Outlook Report | Midyear 2021

by

Retail Market Recovering More Quickly Than Expected; Investors Selective But Actively Acquiring Properties

  • Retail sector poised for growth. Following the upheaval caused by the health crisis, retail property performance is expected to begin realigning with the new realities of space demand.
  • Consumer spending surge to remain during second half. Since February of 2020, core retail sales have soared by 16.8 percent, largely supported by government stimulus.
  • Job creation potential at record levels. Employers are having a challenging time finding and onboarding workers as the economy transitions out of the health crisis.
  • Bevy of light headwinds persist for retail. Most indicators point toward a better-than-expected recovery for the retail market, though some concerns exist that could impact brick-and-mortar locations.

*Through May
Sources: BLS; Federal Reserve; Office of Financial Research; U.S. Census Bureau

Click Here to View the National Retail Outlook Report Midyear 2021

*Forecast | Sources: Marcus & Millichap Research Services; CoStar Group, Inc.; Real Capital Analytics, Capital Economics; Freddie Mac; Moody’s Analytics; Mortgage Bankers Association; National Association of Realtors; National Association of Home Builders; BLS; Federal Reserve; RealPage, Inc.; U.S. Census Bureau; Wells Fargo

Follow Jesse Limon CRE on Twitter

Follow MMREIS on Twitter