CIT Group Inc. and Forbes Insights survey finds middle-market commercial real estate execs are optimistic, but are feeling the strain of taxes and regulations. The joint survey results show that commercial real estate is in cautious recovery, trends in interest rates and unemployment top concerns, tax and regulation are hindering performance, financing ranges from overabundant to spotty.
Quantitative highlights of the survey include:
- 60% of respondents say their “go forward orientation” is optimistic, with a mix of challenges and opportunities.
- 60% say the current tax and regulatory climate is placing a strain on their performance.
- 40% say they are negotiating harder with state and local governments to obtain tax credits.
Find the survey/outlook here.
Q&A with Peter Sotoloff, Managing Director of Originations at Blackstone. The Commercial Observer published an interview with Mr. Sotloff who spoke about establishing Blackstone’s debt business, real estate financing and developments/acquisitions. The interview has some decent insights into Blackstone’s growing real estate focus. Find the interview here.
Barrons (and Morgan Stanley) report multifamily REITs will buck rising rates. Morgan Stanley summarizes “The second half of 2013 saw multifamily REIT revenue and net-operating-income (NOI) growth begin to decline. With supply pressure building, we expect multifamily REIT same-store revenue growth to decline even more to the mid-3%’s in 2014.” Key debates in the multifamily REIT sector include:
- How will rising rates impact multifamily REITs?
- Where is multifamily in the growth cycle?
- How concerned should the market about the supply growth?
CBRE reports a strong finish in 2013 with continued recovery in the fourth quarter. According to CBRE’s end-of-year analysis:
- Office vacancy rate declined 30 basis points to 14.8%, which marks 2013 as the best annual performance since 2006.
- National industrial availability decreased by 40 basis points to 11.3%.
- The overall retail availability in 2013 declined to 12.0%
- Demand for apartment buildings remained strong with a vacancy rate of 5.0%
Find the detailed report with CBRE’s forecasts here.
Mortgage Bankers Association: Lender appetite is expected to exceed that of borrowers in 2014. According to the MBA commercial and multifamily mortgage lending is expected to increase in 2014 based on a survey conducted by top commercial and multifamily mortgage origination firms. Top survey findings include:
- 2013 showed lenders were more eager to make loans than borrowers were to take out loans.
- CMBS loans, banks and life companies are expected to rise in 2014. 85% of respondents anticipate growth to be greater than 5%.
- Loan risk is expected to increase from “medium to somewhat low” to “medium to somewhat high” according to 89% of the respondents.
See you next week.