$300B Investment in CRE Expected for 2012

With 2011 behind us, and reported record numbers from several lenders in commercial real estate such as Met-Life and Real Estate is sure to shine in 2012.


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Team Member Spotlight: Sabine

One of our interns, Sabine from Austria, shares her experience and take on what student housing could offer her and her fellow peers...

My name is Sabine and I am a student of a language school, located here in San Francisco. I’m staying here in San Francisco for 6 months and I’m living with a host family, a house with 10 other students. I really enjoy my time with my host family because of the people. However the lodging situation isn’t what I presumed it would be. 

At one point, some of my peers and I thought about renting and sharing an apartment. Unfortunately, we never ventured to this step, because we didn't have enough information about how it works. We didn't really know where we should search for an apartment, in which neighborhood we should rent, mostly we didn't know if we were even allowed to rent an apartment in the USA, because we were all students from abroad.

It would have been really helpful if our school could inform us about apartment rental, because I know that a lot of students aren’t satisfied with their current options.

More Student Housing Information 
www.l38group.com/studenthousing

Bay Area Tri-County Market Overview

Optimism pervades the multi-family market in the Bay Area Tri-County

Looking ahead to 2012, Latitude 38 Group has identified excellent investment opportunities in the Bay Area Tri-County and has put together a market overview showing the major trends in this area.

Renter demand in San Francisco, Santa Clara and San Mateo counties continues to grow intensively, fueled by booming tech-sector job creation. The limited supply of housing in preferred urban neighborhoods has led to increasing demand in nearby communities in the Peninsula. Because of their proximity to the tech-startup companies, demand in Santa Clara and San Mateo County has been affected most positively. 

Rising rents are attracting investors targeting apartment properties.

In recent years transactions and sales velocity across both counties have built momentum, bringing cap rates close to those in the city.

This has created an opportunity because prices still have not reached pre-recession levels and therefore new development has been delayed. Find out more:CLICK HERE

Head to www.l38group.com for more in-depth look at the multi-family market. 

Time for New Construction in Multi-Family

As vacancy nationwide drops to an all-time low of 5% by year end, an increase of 4M new Americans annually, the supply constraint obviously creates a huge need for new construction.

According to The National Association of Home Builders (NAHB), "declining multifamily vacancy rates are a hopeful sign for future multifamily market expansion". Vacancy reached a twenty year high of 10.4% in the final quarter of 2010.

Now that vacancy will be at 5% there will be a mad rush to build especially with rents going up substantially. A big factor will be the support of the banks and lenders to get back into construction. The other issue is how long it will take for new construction to get back into full swing. That could easily be three to four years away.

To read more on the topic and check out the charts, CLICK HERE.

Apartments are certainly the flavor of the year for REITS

REITS that generally have a core competency in other sectors than multi-family are now investing in apartments. This is driving the apartment sector to yet another level in pricing. Pricing levels that are certainly starting to feel like a bubble.

To read more Click Here 

No Raise Expected for Apartment Cap Rates

Most Think Multifamily Cap Rates Will Stay Put
The movers and shakers in multifamily feel very positive about the overall forecast for the industry. We are not so sure. We believe there is a subtle softening in the market as more product is being exclusively listed. Also with European banks under even more pressure to capitalize positions. 


We believe there will be a greater number of multifamily assets and debt coming on the market for 2012. The new year is shaping out to be quite the year for multifamily, stay tuned with Latitude 38 Group.

Click here to view the article 
Videos:


1. US Multifamily Cap Rates: Keep On Keeping On


2. US The Battle for Multifamily Space - Fall 2011


3. US The Rent versus Own Conundrum

Why Real Estate??

Why and how to invest in real estate?

The real estate market has plenty of opportunities for making big gains, especially with the market at a low period in the economic cycle. While now is a great time to invest in assets that are stable and have very consistent returns, buying and owning real estate is complicated and therefore it is crucial to be well informed.

The goal of this kit, prepared by our team member Mariya Nesheva, is to introduce the reader to the key points of investing in real estate and to provide guidance about how to invest, what factors to consider, how to choose the right assets and generate higher returns.

The first thing one should remember when investing in real estate is that there is a big difference between buying a property as your own residence and buying an investment property. When investing one should put emotions aside and think of what makes sense and what has potential of generating the required return.

Read more: Click on the Link Below

Multifamily Investment Kit

For more useful resources visit L38Group website

Freddie Mac Announces K-702 Offering of K Certificates

Freddie Mac announced today its second offering of K certificates backed only by multifamily mortgarges with a 7 year term. They expect to offer approximately $1 billion in K-702 certificates. Freddie Mac is a leading issuer of agency-guaranteed structured multifamily securities and have already brought in 7 K-deals this year.

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Portland's Multi-Family Market Turning Heads

Many investors are buzzing about about Portland's multi-family market and many currently see it as the hottest U.S. market. Within the last six months there have been 14 trades in Portland. Of the l4 trades, five have been over $30 million and two have been for more than $70 million. According to market-research, vacancy rates are below 4% and are expected to fall to 3.4% by the end of the year while effective rents are expected to grow 5.6% this year.

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Largest Multi-Family Asset in East Bay Acquired

It was announced yestersday that Kennedy Wilson, international real estate investment and services firm, and its partners acquired Bellavista at Hilltop. The property is a 1,008-unit multi-family community in San Pablo, CA. The property was purchased for $140.5 million and is the largest single multi-family asset transaction in the U.S. thus far in 2011. The transaction also represents the largest single multi-family asset acquisition in Kennedy Wilson's history.

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Multi-Family Investment Off to Solid Start In 2011

Interest in U.S. multi-family properties contiues after a solid start at the beginning of 2011. Investment sales dollar volume jumped 40% in the first quarter compared to the same period last year, and according to data, more deals were closed than in any quarter since mid-2005.

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Fannie and Freddie: Plan to Restructure

The multi-family industry has taken a hit recently with the restructuring of Fannie Mae and Freddie Mac. Owners and developers of apartment complexes will feel the impact of any change in the two government-owned lenders. Three years ago, Fannie Mae and Freddie Mac accounted for 70 to 80 percent of the finacning for multi-family housing  but with current plans to restructure, there's no doubt any change will keep the apartment industry on edge.
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SF Bay Area Multi-family Market

Nationwide apartment market continues on a steady recovery. Effective rents increased or remained unchanged from last quarter in 29 out of 30 markets, as is occupancy. Decreasing cap rates followed the reduction in interest rates and increased buyer activity, while new construction was virtually nonexistent. San Francisco Bay Area Multi-family parallels the nationwide market....Read more

Multifamily Acquisition Market Heats Up as Cap Rates Fall

The rosy picture continues with multi-family as positive fundamentals push cap rates lower. The market is definitely heating up.

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