Real Estate Desiderata

11 Charts on various things real estate

Had a post-scheduling snafu, and didn’t get a chance to fix it until this very moment.

• CRE hitting bottom?

• a good time to travel

• some office landlords are doing pretty great

• love that used home smell

• resi markets with a bit of softness

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Real Estate Desiderata

Is commercial real estate hitting bottom?

Random Walk has gathered data on this point (somewhat skeptically), but the evidence continues to mount:

Bloomberg

The Green St. Commercial Property Price index is showing improvement for both multifamily and office buildings.

That’s gotta be a sight for sore eyes.

Market commentary (from the brokers, but still) is downright ebullient:

there are signs that more bidders are eyeing property and loan sales. Recently, lender Parkview Financial marketed about $300 million of loans tied to apartments and offices in New York, New Jersey, and Connecticut. Each loan received multiple offers and bids averaged about 95% of face value . . . [a]n investor looking to raise $120 million of debt to acquire a portfolio of Florida warehouses received a dozen bids from major banks and insurers, according to Michael Gigliotti, a senior managing director at Jones Lang LaSalle Inc. who’s working on the transaction. Three months ago, that type of deal would have received four to five offers, he said.

“You’re getting the triple whammy: Players, prices and indices are all cooperating,” said Gigliotti. “It feels like there’s been a switch flipped. Everybody seems excited and we’re calling it the beginning of a new liquidity cycle.”

A triple whammy! So many whammies!

It’s not just Green St. that’s showing positive signs in pricing.

Trepp’s CRE index is reasonably encouraging, as well, but not quite as encouraging as Green St.

Trepp

Prices are mostly flat, albeit Industrial is rising (data centers, rawr!) and Lodging is falling. No one really talks about lodging, but it’s been getting hit pretty hard.

Flat is better than falling.

To be fair, Trepp’s index only covers the 1H, so it’s quite possible that the last few months have taken a turn for a better.

Trepp also does some interesting work trying to track the various cost pressures that owners and developers have faced (in addition to rising capital costs).

Rising insurance costs are a big one, because it’s a (mere) double-whammy of labor and capital costs.

Repairs and maintenance too, because again, the higher costs of labor.

This chart, however, I cannot figure: