The Gray Report Podcast
By Spencer Gray
The Gray Report PodcastMay 06, 2024
Fed Says No to Rate Cuts. What's Next for Apartment Investors?
With the Fed’s recent decision to keep rates at their current elevated levels, investors are facing a choice between increasingly positive multifamily fundamentals and an extended period of difficult financing.
CNBC: “Fed keeps rates steady as it notes ‘lack of further progress’ on inflation” - https://www.cnbc.com/2024/05/01/fed-rate-decision-may-2024-.html
Apartment List: “National Rent Report: ‘[G]rowth stalled out this month’” - https://www.apartmentlist.com/research/national-rent-data
CBRE: “The Past May Still Be Prologue in Multifamily Markets” - https://www.cbre.com/insights/briefs/motm-the-past-may-still-be-prologue-in-multifamily-markets
Pension Real Estate Association: “Compendium of Statistics” - https://www.prea.org/research/compendium/#:~:text=The%20Compendium%20of%20Statistics%20compiles,is%20available%20to%20members%20only.
RealPage: “Multifamily Starts Plunge in March, Indicating When Supply Wave Could Taper” - https://www.realpage.com/analytics/multifamily-starts-plunge-in-march-indicating-when-supply-wave-could-taper/
Cushman & Wakefield: Top Trends in the Multifamily Market: “Occupancies Are Holding Up Despite Record Deliveries” - https://www.cushmanwakefield.com/en/united-states/insights/top-trends-across-cw-multifamily-portfolio
Institutional Property Advisors: “Consumer Resilience Offers Benefits and Drawbacks for Commercial Real Estate” -
https://www.institutionalpropertyadvisors.com/research/special-report/2024/04/research-brief-april-gdp
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
Mixed Signals for the Economy, Confidence for Multifamily
Multifamily investor sentiment improves even as debt financing challenges continue. Strength in the labor market, robust apartment demand, and stable consumer sentiment are some of the reasons behind this, but another significant factor is the decline in the multifamily construction pipeline.
NMHC: “Quarterly Survey of Apartment Conditions (April 2024)” - https://www.nmhc.org/research-insight/quarterly-survey/2024/nmhc-quarterly-survey-of-apartment-conditions-april-2024/
Fannie Mae: “Commercial-to-Residential Conversions: A Review of Existing Research” - https://www.fanniemae.com/media/51071/display
TheRealDeal: “Chavin surrenders Loop office-to-resi play with deed-in-lieu of foreclosure” - https://therealdeal.com/chicago/2024/04/23/intersection-drops-loop-office-conversion-with-deed-in-lieu/
Moody’s Analytics: “U.S. Consumers Remain Resilient but Blemishes Exist” - https://cre.moodysanalytics.com/insights/cre-news/u-s-consumers-remain-resilient-but-blemishes-exist/
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
Fed delays rate cuts: Is this a multifamily buying opportunity?
Comments this week from Federal Reserve Chair Jerome Powell are among the most forceful indications yet that interest rate cuts may be delayed past initial expectations. While some extreme predictions push the rate cuts all the way out to March 2025, futures data is pointing closer to September (at the moment). These shifting interest rate expectations may curb the activity of a CRE sales market that was just beginning to revive after a sluggish 2023, but strong housing demand and solid apartment fundamentals continue to attract investor attention in the multifamily market.
Reuters: “Blunt Powell signals rate cut plans on ice” - https://www.reuters.com/markets/us/global-markets-view-usa-2024-04-17/
Bloomberg: “Vanguard Warns 10-Year Treasury Yields Risk Jump Back to 5%” - https://www.bloomberg.com/news/articles/2024-04-18/treasuries-vanguard-warns-10-year-yields-risk-spiking-back-to-5
CME Group: "FedWatch Tool" - https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
RealPage: “U.S. Marks Largest Volume of Quarterly Apartment Supply in History” - https://www.realpage.com/analytics/1st-quarter-supply-highest-ever/
RealPage: “Putting 1st Quarter 2024 Apartment Demand in Perspective” - https://www.realpage.com/analytics/perspective-us-apartment-demand-1st-quarter/
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
CPI, Interest Rates, and Blackstone's $10B Multifamily REIT Acquisition
A 3.5% annual jump in CPI inflation numbers has led investors and experts to rethink their expectations of an interest rate cut in mid-year 2024, but Blackstone's recent agreement to acquire Apartment Income REIT Corp. for $10 billion could spark greater investment activity in spite of elevated interest rates, especially given the improving fundamentals in the apartment market. Sources discussed in this episode: CPI: “Consumer Price Index, March 2024” - https://www.bls.gov/news.release/cpi.nr0.htm The Wall Street Journal: “Blackstone Making $10 Billion Multifamily Purchase, Going on the Real Estate Offensive” - https://www.wsj.com/real-estate/blackstone-making-10-billion-multifamily-purchase-going-on-the-real-estate-offensive-f3126928 Yardi Matrix: “Multifamily Sets Strong Early Tone in 2024” - https://www.yardimatrix.com/publications/download/file/5355-MatrixMultifamilyNationalReport-March2024 RealPage: “RealPage Slightly Strengthens Forecast in Most Apartment Markets Based on Economic Indicators” - https://www.realpage.com/analytics/1q24-foreast-update/ For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/ DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
Getting Excited about a "Normal" Market
Sources discussed in this episode:
Moody’s Analytics: “Q1 2024 Preliminary Trend Announcement” - https://cre.moodysanalytics.com/insights/cre-trends/q1-2024-preliminary-trend-announcement/
The Conference Board: "U.S. Leading Economic Index" - https://www.conference-board.org/topics/us-leading-indicators
The Wall Street Journal: "What's Wrong with the Economy? It's You, Not the Data" - https://www.wsj.com/economy/consumers/whats-wrong-with-the-economy-its-you-not-the-data-cfa911e6
Bureau of Labor Statistics: "The Employment Situation - March 2024" - https://www.bls.gov/news.release/empsit.nr0.htm
Apartment List: “March 2024 Rent Report” - https://www.apartmentlist.com/research/national-rent-data
CBRE: “Made in the Midwest” - https://www.cbre.com/insights/reports/made-in-the-midwest
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/
DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
Renting vs. Buying - Suburbs vs. Downtown
Costs for homebuyers have been growing at more than twice the rate as rentals, making renting a more affordable option. Buoyed by recent data on apartment fundamentals multifamily investors are re-entering the market, undaunted by persistent high interest rates, last year's sluggish rent growth, and projections of elevated supply through the end of 2024. Sources discussed in this episode: Realtor.com: “February 2024 Rental Report: Renting a starter home is more affordable than buying one in all 50 metros” - https://www.realtor.com/research/february-2024-rent/ CBRE: “Assessing Investor Sentiment: A Window Of Opportunity” - https://www.cbre.com/insights/articles/cmc-episode-4-investor-sentiment Moody’s Analytics: “This Time is Different: A Counter to the Urban Doom Loop Narrative” - https://cre.moodysanalytics.com/insights/market-insights/this-time-is-different-a-counter-to-the-urban-doom-loop-narrative/ Harvard Joint Center for Housing Studies: “After Leading a Back to the City Movement, Many Millennials Moved to the Suburbs” - https://www.jchs.harvard.edu/blog/after-leading-back-city-movement-many-millennials-moved-suburbs Gray Report Commentary: “Rent a Starter Home More Affordable Than Buying” - https://www.graycapitalllc.com/gray-report-commentary-march-29-2024/ For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/ DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
Fed Keeps Rates Steady (and High)—Multifamily Impacts
The Federal Reserve has thus far not deviated from its projections of 3 federal funds rate reductions in 2024, but it is in no hurry to start. While current elevated rates are not ideal for multifamily borrowers, multifamily investors with a longer-term view of the apartment market and housing demand have markedly increased their intentions to invest this year.
Sources discussed in this episode:
The Wall Street Journal: “Stocks Gain after Fed Holds Rates Steady” - https://www.wsj.com/livecoverage/fed-meeting-fomc-interest-rate-decision-march-2024
Trepp: "Trepp Property Price Index (TPPI): Rate Cut Speculations Shape Varied Property Sector Performance in Q4 2023" - https://www.trepp.com/trepptalk/tppi-2023-q4-rate-cut-speculations-shape-varied-property-sector-performances
Cushman & Wakefield - “Deciphering Today’s Debt Market” - https://www.cushmanwakefield.com/en/united-states/insights/deciphering-the-debt-market
CNBC: “Biden targets ‘rent gouging’ landlords as high housing costs factor into 2024 race” - https://www.cnbc.com/2024/03/19/biden-targets-rent-gouging-landlords-as-high-housing-costs-2024-race.html
The White House: “FACT SHEET: President Biden Announces Plan to Lower Housing Costs for Working Families” - https://www.whitehouse.gov/briefing-room/statements-releases/2024/03/07/fact-sheet-president-biden-announces-plan-to-lower-housing-costs-for-working-families/
U.S. Department of Housing and Urban Development: "Existing Policy on Non-Rent Fees in Housing Choice Voucher (HCV) and Project-Based Voucher (PBV) Programs" - https://www.hud.gov/sites/dfiles/PIH/images/HCV_PBV%20Non-Rent%20Fees%20Chart_Final_2-21-24.pdf
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/
DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
RealPage's Carl Whitaker on the Data Driving the Multifamily Market
In a return appearance on the Gray Report, RealPage Director of Research & Analysis Carl Whitaker discusses economic trends, construction issues, rent growth developments, and the data that can give multifamily investors a clear view of the market in 2024. For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/ DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
Multifamily Borrowers Are Not out of the Woods Yet
Multifamily loan maturities have not led to a full-scale crisis in the apartment investment market, but the issue is far from resolved for many borrowers, which could lead to pockets of distress in the sector.
Sources discussed in this episode: Yardi Matrix: “Multifamily Loans Coming Due Face Stress Test” - https://www.yardimatrix.com/publications/download/file/5217-MatrixResearchBulletin-MultifamilyMaturity-March2024 Bureau of Labor Statistics: “Consumer Price Index, February 2024” - https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm Harvard Joint Center for Housing Studies: “Power to the Neighborhoods: NYC Growth Politics and the Origins of the Housing Crisis” - https://www.jchs.harvard.edu/blog/power-neighborhoods-nyc-growth-politics-and-origins-housing-crisis For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/ DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
Grant Cardone's Take on the Multifamily Market
Grant Cardone shares his inimitable insights on the current state of multifamily investment and specific markets across the country. For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/ DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
Yardi Matrix's Paul Fiorilla on What's Driving the Multifamily Market in 2024
Gray Report host Spencer Gray speaks with guest Paul Fiorilla, Director of Research at Yardi Matrix, and reviews the most important trends affecting the multifamily market in 2024. For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/ DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
Cap Rate and Interest Rate Trends in 2024
Cap rate trends and interest rate trends have come under the spotlight, with several reports on the topic as well as specific developments that will play a major factor in how the economy progresses.
Sources discussed in this episode:
Federal Reserve Bank of the United States: “Monetary Policy Report” - https://www.federalreserve.gov/publications/files/20240301_mprfullreport.pdf
Capital Spectator: “US Growth Expected To Slow In Next Month’s Q1 GDP Report” - https://www.capitalspectator.com/us-growth-expected-to-slow-in-next-months-q1-gdp-report/
CBRE: “U.S. Cap Rate Survey H2 2023” - https://www.cbre.com/insights/reports/us-cap-rate-survey-h2-2023
https://sprcdn-assets.sprinklr.com/2299/d55fbd12-8b34-4725-8e93-6ae0119dad6d-603683686.pdf
Newmark: “Valuation and Advisory’s North American Market Survey” - https://www.nmrk.com/storage-nmrk/uploads/documents/va-market-survey/Newmark_VA_North-American-Market-Survey-2024.pdf
Marcus & Millichap: “January CRE Foreclosures” - https://www.marcusmillichap.com/research/videos/2024/03/january-cre-foreclosures
Apartment List: “National Rent Report, Feb. 2024” - https://www.apartmentlist.com/research/national-rent-data
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/
DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
Multifamily Predictions Converge on Optimism
As we move further from the uncertainty and rent growth stagnation of 2023, an increasing number of sources are finding room for optimism in the multifamily investment market. A looming drop-off in multifamily supply, the consequence of an interest-rate-driven decline in new construction projects, has become a central part of projections for the multifamily market, leading to expectations of higher rent growth and increased apartment demand in 2025 and 2026.
Sources discussed in this episode: Bureau of Economic Analysis: “PCE Inflation, January 2024” - https://www.bea.gov/news/2024/personal-income-and-outlays-january-2024 John Burns Research and Consulting, CRE Daily: “Fear and Greed Survey, 4Q23” - https://jbrec.com/wp-content/uploads/2024/02/Fear-and-Greed-Index-Chartbook-2024-02.pdf Newmark: “4Q23 State of the U.S. Capital Markets” - https://www.nmrk.com/storage-nmrk/uploads/documents/4Q23-Newmark-State-of-the-U.S.-Capital-Markets_FINAL_EXTERNAL.pdf Fannie Mae: “2024 Outlook for Multifamily Affordability – Many Renters Remain Cost-Burdened” - https://www.fanniemae.com/media/50411/display CBRE: “Multifamily Market Travails Not Likely to Last” - https://www.cbre.com/insights/briefs/cotw-multifamily-market-travails-not-likely-to-last For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/ DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
Single Family Rentals and the Multifamily Market
Single family rentals are a growing portion of the housing market, and while the single family market is correlated and connected to multifamily performance, single family rentals are not necessarily a competitive threat to the multifamily market. Sources cited in this episode: Yardi Matrix: National Multifamily Report, Jan. 2024 - https://www.yardimatrix.com/publications/download/file/5071-MatrixMultifamilyNationalReport-January2024 CoreLogic: “US Single-Family Rent Index – February 2024” - https://www.corelogic.com/press-releases/corelogic-us-annual-rent-growth-remains-slow-steady-december/ RealPage: “Incomes Grew Faster Than Rents in 2023” - https://www.realpage.com/analytics/rent-income-ratios-decline-2023/ Moody’s Analytics: “Q4 2023 Housing Affordability Update: Rent Burden Lightened for Median US Households Last Year, but Not Everyone Felt the Relief” - https://cre.moodysanalytics.com/insights/market-insights/q4-2023-housing-affordability-update-rent-burden-lightened-for-median-us-households-last-year-but-not-everyone-felt-the-relief/ For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter Learn more about Gray Capital's latest multifamily investment offering for accredited investors: https://www.graycapitalllc.com/new-offering/ DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.
Could Multifamily Crash in 2024? Really?
This month's inflation report came in slightly higher than expected, causing some worry that the much-anticipated interest rate cuts from the Fed may not arrive as quickly as previously thought. A "higher for longer" environment is one reason why some are pessimistic about multifamily in 2024, but there is little evidence for continued declines in multifamily valuations, which are already 20-30% below the peak. Consistent demand, a more balanced supply/demand environment after 2024, and, yes, lower interest rate expectations are a strong counter-balance to multifamily doomsayers and help explain why investors intend to be far more active this year compared to 2023.
Gray Capital's latest multifamily offering for accredited investors: https://www.graycapitalllc.com/new-offering/
Link to webinar on February 20 at 1PM Eastern: https://youtube.com/live/LCkECUK05BI?feature=share
Sources cited in this episode:
Bureau of Labor Statistics: “Consumer Price Index - January 2024” - https://www.bls.gov/news.release/cpi.nr0.htm
BiggerPockets: “Multifamily Is at High Risk of Continuing Its Historic Crash in 2024—Here’s Why” - https://www.biggerpockets.com/blog/multifamily-crash-to-continue-through-2024
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Offering limited to accredited investors.
Optimism and Clarity in the Multifamily Market
Compared to the prevailing uncertainties of 2023, a better view of the multifamily market and its driving forces points to increased investment activity as the year progresses. Significant challenges remain for apartment operators in 2024, but greater clarity on apartment construction, interest rates, housing demand, and the economy, alongside pent-up demand from investors who were inactive this past year, are a marked contrast from 2023 and highlight the solid investment prospects of the multifamily market. Sources cited in this episode: Moody’s Analytics: “Groundhog Day: Will There Be A Long Winter for CRE?” - https://cre.moodysanalytics.com/insights/cre-news/groundhog-day-will-there-be-a-long-winter-for-cre/ RealPage: “7 Takeaways from NMHC’s Annual Meeting” - https://www.realpage.com/analytics/7-talking-points-nmhc-2024/ Marcus and Millichap: “U.S. Multifamily Investment Forecast” - https://www.marcusmillichap.com/research/market-report/multiple-markets/2024-us-multifamily-investment-forecast Blackrock: “Private Markets Outlook” https://www.blackrock.com/institutions/en-us/literature/whitepaper/2024-private-markets-outlook-stamped.pdf For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcasts does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
NMHC Conference Insights on the Apartment Market in 2024
The enormous amount of apartment supply expected this year should temper any expectations of apartment demand, but newly-published research on the topic argues that U.S. housing needs are far larger than can be addressed even with the historic amount of multifamily completions last year and forecasted for this year. On the capital markets side, recent data points to a substantial increase in CRE investment interest, but given the Federal Reserve's recently-announced intentions to keep interest rates at their current levels past March of this year, the market may not thaw until later in the summer when financing conditions improve.
Sources cited in this episode:
CBRE: “2024 U.S. Investor Intentions Survey: Investment Activity Expected to Increase” - https://www.cbre.com/insights/briefs/2024-us-investor-intentions-survey
Moody’s Analytics: “One Good Year Does Not Solve America’s Housing Shortage” - https://cre.moodysanalytics.com/insights/cre-news/one-good-year-does-not-solve-americas-housing-shortage/
Harvard Joint Center for Housing Studies: “Six Takeaways from America’s Rental Housing 2024” / America's Rental Housing 2024 - https://www.jchs.harvard.edu/blog/six-takeaways-americas-rental-housing-2024 / https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_Americas_Rental_Housing_2024.pdf
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Eye to Eye with Apartment Supply
While recent migration and employment data highlights the continued growth of the Sunbelt, the massive amount of newly-built apartments in Sunbelt markets far outweigh the effects of demand drivers like population or job growth. Given this dynamic, investors may find higher-performing assets in multifamily markets in the Midwest and Northeast that have not seen as much apartment construction.
Sources discussed in this episode:
John Burns Research and Consulting: “How to Ride the Apartment Supply Wave” - https://jbrec.com/insights/how-to-ride-the-apartment-supply-wave/
Apartment List: “Renter Migration Report: 2024” - https://www.apartmentlist.com/research/apartment-list-renter-migration-report-2024
RealPage: “Our Economists’ Picks for Favorite Apartment Markets in 2024” - https://www.realpage.com/analytics/markets-outperform-2024/
Fannie Mae: “2024 Multifamily Market Outlook: Instability Expected as Skies Remain Cloudy” - https://www.fanniemae.com/media/50101/display
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Top Markets for 2024
Markets in the Northeast and the Sun Belt continue to get attention, along with mountain locales like Idaho and Montana, but affordability is a significant draw for Midwestern markets like Cincinnati and Indianapolis. Sources discussed in this episode: U-Haul: “Top Growth States of 2023” - https://www.uhaul.com/Articles/About/U-Haul-Announces-Top-Growth-States-Of-2023-30660/ United Van Lines: "2023 Annual National Movers Study" - https://www.unitedvanlines.com/newsroom/movers-study-2023 Atlas Van Lines: “2023 Migration Patterns Study” - https://www.atlasvanlines.com/resources/migration-patterns Zillow: “Hottest Housing Markets of 2024” - https://zillow.mediaroom.com/2024-01-04-Buffalo-charges-to-the-top-of-Zillows-2024-hottest-markets-list NAR: “County Median Home Prices and Monthly Mortgage Payment” - https://www.nar.realtor/research-and-statistics/housing-statistics/county-median-home-prices-and-monthly-mortgage-payment Berkadia: “2024 National Forecast Report” - https://berkadia.com/wp-content/uploads/2024/01/Berkadia-2024-Forecast-National-multifamily-research.pdf Moody’s Analytics: “Takeaways from the CRE Finance Council Conference” - https://cre.moodysanalytics.com/insights/cre-news/january-2024-crefc-miami-takeaways/ For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Inflation, Private Credit, and Multifamily Survival
Recent reporting on commercial real estate financing has highlighted the role of private credit in providing funding for CRE sponsors/owners and delaying the need for a capital call, and despite the expectation of interest rate reductions later in the year, it is clear that private credit will remain an important tool in 2024. Newly-published reports on multifamily performance continue to clarify the near-term challenges for apartment operators, but data showing record vacancies for office properties presents a bleaker picture and signs of persistent shifts in remote/in-person work that could lead to more sustained housing demand in the future.
Sources discussed in this episode:
Bureau of Labor Statistics: “Consumer Price Index, December 2023” - https://www.bls.gov/news.release/cpi.nr0.htm
MSCI: “Inflating Returns with Private Lending Subscription Lines of Credit” - https://www.msci.com/www/blog-posts/inflating-returns-with/04311213880
Apartment List: “National Rent Report, December 2024” - https://www.apartmentlist.com/research/national-rent-data
Integra Realty Resources: “2024 Viewpoint Report” - https://www.irr.com/news/just-released-viewpoint-2024-25065
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Timing Interest Rates and the Multifamily Market
While the continued surge in newly-constructed apartments is relatively unchanged from 2023, the outlook for 2024 interest rates is less clear. The longer-term prospects for the multifamily market remain strong, but given the continued pressure from apartment supply, investors who speculate on lower interest rates and future asset valuation increases could be vulnerable to short-term headwinds. Sources discussed in this episode: Reuters: “Higher forever? Markets see few rate cuts after 2024” - https://www.reuters.com/markets/rates-bonds/higher-forever-markets-see-few-rate-cuts-after-2024-2023-12-29/ RealPage: “Rents Flat as Supply Surges” - https://www.realpage.com/analytics/december-2023-data-update/ Cushman & Wakefield: “10 Critical Questions for CRE and the Economy in 2024” - https://www.cushmanwakefield.com/en/united-states/insights/10-critical-questions Apartment List: “National Rent Report, December 2023” - https://www.apartmentlist.com/research/national-rent-data For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Key Differences: 2024 vs. 2023 Multifamily Market
Recent forecasts and expectations for the 2024 CRE and multifamily markets are not very much different than the discussions heading into 2023: Economic uncertainty, expense burdens, high interest rates, and historic amounts of new apartment supply will be major factors for multifamily asset performance next year the same as they were this year, but interest rate cuts on the horizon, lower inflation, and an uptick in consumer confidence are key differences from last year and possible glimpses of an end to stagnation for the apartment market. Sources discussed in this episode: RealPage: “What We Got Right - and Wrong - About the Apartment Market in 2023” - https://www.realpage.com/analytics/what-we-got-right-2023/ Yardi Matrix: 2024 Forecast: Multifamily Demand to Stay Positive, but Market Faces Hurdles - https://www.yardimatrix.com/publications/download/file/4915-MatrixMultifamilyNationalReport-Winter2024?signup=false&utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz-_GbAT2FAplKsj8izORE9R-sxnTxPU1EEyhw5Cid8Y1Jqqxgq1vbNojzBzzelmkUpqJHrTd The Conference Board: “Consumers End 2023 with a Surge in Confidence and Restored Optimism For 2024” - https://www.conference-board.org/topics/consumer-confidence University of Michigan: "Surveys of Consumers" - http://www.sca.isr.umich.edu/ For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.
2024 Predictions for Multifamily and the Economy
The Gray Capital team shares their predictions for the multifamily market and the economy in 2024, comparing them to other forecasts that have recently been published. Sources discussed in this episode: Marcus & Millichap: “What to Expect for CRE in 2024” - https://www.marcusmillichap.com/research/videos/what-to-expect-for-cre-in-2024 CBRE: “U.S. Real Estate Market Outlook 2024” - https://www.cbre.com/insights/books/us-real-estate-market-outlook-2024/multifamily Cushman & Wakefield: “2024 U.S. Macro Outlook: A Rolling Recession Is Here” - https://www.cushmanwakefield.com/en/united-states/insights/us-macro-outlook Fannie Mae: “Multifamily Values Not Driven Solely by Rent Growth” https://www.fanniemae.com/media/49951/display For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
2024 Forecasts: Interest Rates and Multifamily Performance
On the heels of a CPI report showing inflation on the slow decline, Federal Reserve Chairman Jerome Powell announced that the FOMC would keep the federal funds rate at its current level, with 3 rate cuts expected in 2024. Stock markets reacted with the typical enthusiasm associated with the hope of lower interest rates, and some interesting buying opportunities could emerge in 2024 for investors tracking stronger long-term rent growth and lower financing costs in the multifamily market. Sources discussed in this episode: Bureau of Labor Statistics: “Consumer Price Index - November 2023” - https://www.bls.gov/news.release/cpi.nr0.htm GlobeSt: “Prediction: Multifamily Distress Will Start in H2 2024” - https://www.globest.com/2023/12/11/prediction-multifamily-distress-will-start-in-h2-2024/ Colliers: “2024 Outlook: Navigating Equilibrium, Distress, and Anticipated Policy Easing in Commercial Real Estate” - https://www.colliers.com/en/research/outlook-2024 Cushman & Wakefield: “2024 U.S. Macro Outlook: A Rolling Recession Is Here” - https://www.cushmanwakefield.com/en/united-states/insights/us-macro-outlook Harvard Joint Center for Housing Studies: “Move over Millennials, Gen Z Is Driving Rental Demand” - https://www.jchs.harvard.edu/blog/move-over-millennials-gen-z-driving-rental-demand For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.
Non-Bank Lending Helps CRE "Survive Until 2025"
There is little reason to expect that last-minute deals will buoy the low sales activity in the multifamily market in 2023, but investors should look for opportunities to emerge in 2024 as persistent challenges change the calculation for property owners unable to "survive until 2025." Sources discussed in this episode: Moody’s Analytics: “Timing out the CRE Waiting Game” - https://cre.moodysanalytics.com/insights/cre-news/timing-out-the-cre-waiting-game/ GlobeSt: “Multifamily Maturities Weaken, While Office Improves” - https://www.globest.com/2023/12/04/multifamily-maturities-weaken-while-office-improves/ Institutional Investor: “As Private Credit Surges, Banks and Alternative Asset Managers Turn Frenemies Rather Than Foes” - https://www.institutionalinvestor.com/article/2ciy5fv74kddt9eoq1m2o/corner-office/as-private-credit-surges-banks-and-alternative-asset-managers-turn-frenemies-rather-than-foes RealPage: “Apartment Rents Remain Flat, and Could Be for a While” - https://www.realpage.com/analytics/november-2023-data-update/ Yardi Matrix: “National Multifamily Report, November 2023” - https://www.yardimatrix.com/publications/download/file/4781-MatrixMultifamilyNationalReport-November2023 Apartment List: “7 Predictions for the 2024 Rental Market” https://www.apartmentlist.com/research/2024-rental-market-predictions For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.
Light at the End of the Tunnel Getting Brighter for Multifamily
Continued updates on housing starts and permits shows multifamily construction starts down sharply even as single family construction continues to grow. The seasonal cooldown in rent growth is less pronounced than last year but remains a challenge for owners and operators continuing to deal with high expenses and the pressure of persistent high interest rates. At the same time, positive economic signals, continued investor confidence in the multifamily sector, and improving balance of apartment supply and demand point to strong longer-term prospects for multifamily investments.
Link to sources discussed in this episode:
Fortune: “The red-hot economy is growing even faster than we thought, with GDP surging 5.2% last quarter” - https://fortune.com/2023/11/29/u-s-economy-gdp-revision-5-2/
CNBC: "Black Friday weekend shopping turnout soars to a record, as consumers seek bargains" - https://www.cnbc.com/2023/11/28/black-friday-weekend-shopping-turnout-soars-to-a-record.html
RealPage: “Census is Likely Overstating Multifamily Starts in 2023” - https://www.realpage.com/analytics/us-census-starts-probably-overstated/
Axios: “Home vacancies near all-time lows as housing shortage bites” - https://www.axios.com/2023/11/21/housing-shortage-vacancies
Colliers: “Capital Markets U.S. Snapshot | 2023 Q3” - https://www.colliers.com/en/research/capital-markets-us-snapshot-q3-2023
Apartment List: “National Rent Report, November 2023” - https://www.apartmentlist.com/research/national-rent-data
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.
The Multifamily Market Adjustment Is Just Beginning
With forecasts of greater supply and continued pressure from high interest rates, predictions that we are in the early moments of CRE valuation adjustment are gaining prominence, but expanded interest in non-bank lending is helping multifamily borrowers looking to resolve challenges related to increased borrowing costs.
Sources discussed in this episode:
Newmark: “United States Multifamily Capital Markets, 3Q 2023” - https://www.nmrk.com/insights/market-report/united-states-multifamily-capital-markets-report
Cushman & Wakefield: “Market Matters, Nov. 20, 2023” - https://www.cushmanwakefield.com/en/united-states/insights/market-matters-exploring-real-estate-investment-conditions-and-trends
Bloomberg (via Yahoo Finance): “Private Credit Titans Are Grabbing More Than Half of New Deals” - https://finance.yahoo.com/news/private-credit-titans-grabbing-more-150041214.html
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.
A Paradigm Shift for Multifamily
With continued low CRE property sales and a narrow cap rate-interest rate spread, investors looking for investment opportunities are turning to non-bank lending, preferred equity, and other strategies in place of direct investment and acquisitions. Sources discussed in this episode: CPI: “Consumer Price Index: October 2023” - https://www.bls.gov/news.release/cpi.nr0.htm Urban Land Institute: “2024 Emerging Trends in Real Estate” - https://knowledge.uli.org/-/media/files/emerging-trends/2024/2024-etre-us.pdf CBRE: “How Much Stress is Likely on the Road to Distress?” - https://www.cbre.com/insights/briefs/client-call-how-much-stress-is-likely-on-the-road-to-distress Yardi Matrix: “Multifamily Supply Forecast: Q4 2023” - https://www.yardimatrix.com/publications/download/file/4648-YardiMatrixMultifamilySupplyForecastQ42023 For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
2024 Multifamily Lending Forecasts Get Interesting
New data showing that multifamily loan originations are down 50% from last year (and down by 40% compared to pre-pandemic 2019 numbers) joins a growing discussion about the changing state of multifamily lending, and a recent report suggests that rent growth patterns are stabilizing and trending toward historical norms. Sources discussed in this episode: Mortgage Bankers Association: “Quarterly Survey of Commercial / Multifamily Mortgage Bankers Originations | Q3 2023” - https://www.mba.org/docs/default-source/research-and-forecasts/cmf-originations-index/3q23cmforiginationssurvey.pdf RealPage: “After Rapid Cooldown, Apartment Rents Plateau (For Now)” - https://www.realpage.com/analytics/october-2023-data-update/ Cushman & Wakefield: “Multifamily Monthly: Preferred Equity Update” - https://www.cushmanwakefield.com/en/united-states/insights/multifamily-monthly Reuters: “US regulators agree to ramp up oversight of systemically risky non-banks” - https://www.reuters.com/business/finance/us-financial-regulators-approve-process-revive-systemically-important-non-bank-2023-11-03/ Bisnow: "REPORT: Freddie Mac Investigating Meridian Capital" - https://www.bisnow.com/national/news/capital-markets/freddie-mac-begins-investigation-of-meridian-capital-121524 For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Will the Fed's Rate Hike Pause Restart CRE Markets?
For CRE investors waiting to buy (or sell) properties, a rate hike pause may not be enough to encourage their re-entry into the market as investors expect further cap rate expansion in 2024. For multifamily specifically, confidence in longer-term asset performance has led to greater investor interest compared to other CRE sectors, but overall investment volume is lower than pre-pandemic averages. Sources discussed in this episode: Gray Capital: "Huge Buying Opportunity: Potential Multifamily Crash?" - https://youtu.be/TBZB9vpDW6M Reuters: “Fed keeps rates unchanged, acknowledges economy is 'strong’” - https://www.reuters.com/markets/us/fed-poised-hold-rates-steady-despite-economys-bullish-tone-2023-11-01/ Independence Realty Trust: "Independence Realty Trust Announces Third Quarter 2023 Financial Results" - https://investors.irtliving.com/press-releases/press-release/2023/Independence-Realty-Trust-Announces-Third-Quarter-2023-Financial-Results/default.aspx John Burns Research and Consulting: “Home Supply Glut?” - https://www.linkedin.com/posts/johnburns7_if-not-for-the-lack-of-resale-homes-we-would-activity-7124734200955510784-RlKv?utm_source=share&utm_medium=member_desktop Jay Parsons (RealPage): “Cap rates are not (directly) correlated with interest rates” - https://www.linkedin.com/posts/jay-parsons-a7a6656_cre-capitalmarkets-multifamilyrealestate-activity-7124753714694819841-heSF?utm_source=share&utm_medium=member_desktop Promarket (U Chicago Booth School of Business) - “Evaluating Concerns of Collapsing Commercial Real Estate Prices” - https://www.promarket.org/2023/10/10/evaluating-concerns-of-collapsing-commercial-real-estate-prices/ Apartment List: “National Rent Report, October 2023” - https://www.apartmentlist.com/research/national-rent-data For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Rents Cheaper than Ever vs. Buying: What Happens in 2024?
While home buyers contend with higher costs, apartment renters have benefited from lower rent growth in 2023, with recent coverage of the housing market describing how rising mortgage rates and still-elevated home values have led to soaring costs of home ownership compared to the price of rent. Sources discussed in this episode: The Wall Street Journal: There’s Never Been a Worse Time to Buy Instead of Rent - https://www.wsj.com/economy/housing/theres-never-been-a-worse-time-to-buy-instead-of-rent-bd3e80d9 RealPage: “Which Markets Could Be Most—and Least—Impacted by Apartment Construction?” - https://www.realpage.com/analytics/markets-most-impacted-by-apartment-construction/ Freddie Mac: “Millennial household formation—potential for another 3 million households” - https://www.freddiemac.com/research/forecast/20231020-US-economy-continues-to-grow-at-a-pace-closer-to-long-term-trend For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.
What are Multifamily Investors Waiting For?
While recent comments and reports depict our current moment as a substantial opportunity for multifamily investors, there has been little disagreement about the headwinds for apartment performance in 2024, with continued rent growth stagnation and elevated interest rates as prominent challengers for investors. A more favorable environment for multifamily asset performance is expected to develop moving into 2025, but for many apartment investors, the math simply does not work right now. Sources discussed in this episode: Marcus & Millichap: “Is Now the Time to Buy Multifamily?” - https://www.marcusmillichap.com/research/videos/is-now-the-time-to-buy-multifamily Marcus & Millichap: “What's Holding Sidelined Capital Back?” - https://www.marcusmillichap.com/research/videos/whats-holding-sidelined-capital-back Apartment List: “More than Half of All Renters Are "Cost-Burdened" According to New Census Data” - https://www.apartmentlist.com/research/more-than-half-of-all-renters-are-cost-burdened Fannie Mae: “Fannie Mae Multifamily Introduces Sponsor-Dedicated Workforce (SDW) Housing to Support Workforce Rental Affordability” - https://www.fanniemae.com/newsroom/fannie-mae-news/fannie-mae-multifamily-introduces-sponsor-dedicated-workforce-sdw-housing-support-workforce-rental Fannie Mae: “Multifamily and Economic Commentary, Oct. 2023: Rising Number of Multifamily Properties Offering Concessions” - https://www.fanniemae.com/media/49331/display RealPage: “Here’s the Most Unexpected Twist of the Apartment Sector in 2023” - https://www.realpage.com/analytics/class-b-market-softening/ For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Have Prices Hit Bottom for Multifamily?
The Gray Capital team discusses cap rate trends and apartment supply. Also in this episode, Gray Capital President, CEO, and Co-Founder Spencer Gray brings Hannah Ott and Cameron Benz, powerhouse multifamily brokers on the Indianapolis Cushman & Wakefield team, into the studio for a discussion of what's happening on the ground for multifamily buyers and sellers.
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Will banks let multifamily borrowers "extend and pretend"?
Multifamily assets have proven their worth in both strong and weak economies, but cripplingly high interest rates have frozen the sales market for apartment properties in 2023, leaving the outlook unclear for 2024. Even though the potential for lenders to grant accommodations to troubled borrowers could extend the stagnation and uncertainty in the multifamily sales market, pressures on bank balance sheets could prevent lenders from providing help to many lenders.
Sources discussed in this episode:
Federal Reserve Instagram Account - https://www.instagram.com/federalreserveboard/
Bisnow: Could Discounted Loan Payoffs Be What Finally Restarts The CRE Debt Market?” - https://www.bisnow.com/national/news/capital-markets/debt-negotiations-stalling-discounted-payoff-option-120929
Business Insider: Biden's top economist says the key to ending the housing crisis is giving cities and developers monetary incentives to build more affordable homes - https://www.businessinsider.com/housing-crisis-monetary-incentives-build-affordable-housing-economist-jared-bernstein-2023-10
Apartment List: “National Rent Report, September 2023” - https://www.apartmentlist.com/research/national-rent-data
Harvard Joint Center for Housing Studies “Home Prices and Interest Rates Still Rising, Shutting out More Potential Homebuyers” - https://www.jchs.harvard.edu/blog/home-prices-and-interest-rates-still-rising-shutting-out-more-potential-homebuyers
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Loan Maturities Will Reshape the Market
Reports of persistently-high expenses for commercial real estate operators, extended periods of higher interest rates, and lower rent growth have compounded the potential for distress linked to the wave of multifamily loan maturities due in Q4 of this year. Solid, long-term fundamentals and robust housing demand continue to make multifamily an attractive investment, but for floating-rate borrowers whose loans are coming due, these accumulating challenges could motivate sales at prices low enough to break the multifamily sales market out of its current stagnation. Sources discussed in this episode: Gray Capital: Research Update: "Wave Multifamily Loan Maturities Imminent" - https://www.graycapitalllc.com/report/ CBRE: Older Multifamily Properties Achieve Above-Average Rent Growth - https://www.cbre.com/insights/briefs/older-multifamily-properties-achieve-above-average-rent-growth RealPage: “Concession Usage in Minneapolis More Than Doubles Midwest Average” - https://www.realpage.com/analytics/minneapolis-concessions-double-midwest-average/ Bloomberg (via The Seattle Times): "First American city to tame inflation owes success to affordable housing" - https://www.seattletimes.com/business/first-american-city-to-tame-inflation-owes-success-to-affordable-housing/ For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Interest Rate Reality Check for the Multifamily Market
The Federal Reserve decided this week to maintain the current Federal funds rate without an increase (or decrease), but their updated economic projections suggest that the Fed is more driven to sustain these elevated rates through 2024, increasing their end-of-year 2024 projection from 4.6% in June to 5.1% now. While CRE pricing has been trending down since the start of this elevated interest rate regime, these extended projections of lasting high rates could accelerate further price discovery, especially in the context of the dramatic increase in loan maturities coming due in Q4 2023 and early 2024. Sources discussed in this episode: CBRE: Midyear Pulse Check: U.S. Multifamily Market - https://www.cbre.com/insights/briefs/midyear-pulse-check-us-multifamily-market RealPage: “Class A Rent Performance Weighing Down Some Apartment Markets” - https://www.realpage.com/analytics/class-a-underperformance/ RealPage: “Flip the Script: Wage Growth Is Outpacing Rent Growth Again” - https://www.realpage.com/analytics/wage-growth-outpacing-rent-increases/ Yardi Matrix: “Multifamily Rent Forecast Update” - https://www.yardimatrix.com/publications/download/file/4482-MatrixBulletin-MultifamilyForecast-August2023 Cushman & Wakefield: “Market Matters” - https://www.cushmanwakefield.com/en/united-states/insights/market-matters-exploring-real-estate-investment-conditions-and-trends For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Enormous Housing Demand Is a Good Sign for Multifamily
While recent topline inflation numbers may help justify the recent interest rate increase from the Federal Reserve, a more compelling signal of economic activity can be seen in the robust housing demand that has led to rebounding single family home prices in spite of the high mortgage rate environment, which is a strong indication of robust multifamily demand moving forward.
CBRE: “2023 U.S. Real Estate Market Outlook Midyear Review” - https://www.cbre.com/insights/reports/2023-us-real-estate-market-outlook-midyear-review
Yardi Matrix: “National Multifamily Report, August 2023” - https://www.yardimatrix.com/publications/download/file/4361-MatrixMultifamilyNationalReport-August2023
Apartment List: “Rents Continue to Dip, While Home Prices Rebound to All-Time Highs” - https://www.apartmentlist.com/research/rents-continue-to-dip-while-home-prices-rebound
CoreLogic: “US Home Price Insights – September 2023” - https://www.corelogic.com/intelligence/us-home-price-insights-september-2023/
The Harvard Joint Center for Housing Studies: “With Existing Inventories Historically Low, Homebuyers Turn to the New Home Market” - https://www.jchs.harvard.edu/blog/existing-inventories-historically-low-homebuyers-turn-new-home-market
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.
Near-Term Struggles and Long-Term Strength for Multifamily
Recent reports on the apartment market show year-over-year rent growth heading into negative territory after 18+ months of deceleration from its peak in late 2021/early-2022. Alongside lower rent growth and higher vacancy, apartment operators contend with rising expenses and higher interest rates, and the sharp increase in multifamily loan maturities in the coming months is a dramatic example of the potential for near-term distress in the market. Despite these ongoing challenges, the long-term fundamentals of the apartment market are strong. Climbing homebuying costs and consistently-high single-family home valuations signify continued high housing demand in spite of high interest rates, and the apartment market remained relatively stable while adding the most new apartment supply in decades, a mark of resilience for the sector that will strengthen as new supply is expected to decrease in the coming years. Sources discussed in this episode: RealPage: “U.S. Job Growth Exceeds Expectations in August” - https://www.realpage.com/analytics/august-job-growth-exceeds-expectations/ Apartment List: “National Rent Report” - https://www.apartmentlist.com/research/national-rent-data Marcus & Millichap: “Multifamily National Report, 3Q 2023” - https://www.marcusmillichap.com/research/special-report/2023/09/3q23-multifamily-national-report CBRE: “Multifamily rent growth to persist where least expected” - https://www.cbre.com/insights/briefs/motm-multifamily-rent-growth-to-persist-where-least-expected Harvard Joint Center for Housing Studies: “Local Population Growth Dependent on Migration and Immigration” - https://www.jchs.harvard.edu/blog/local-population-growth-dependent-migration-and-immigration-2022-0 For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
"Secret" Distress and Quiet Capital Markets for Multifamily
Low transaction activity in the commercial real estate markets has some looking for "secret" distress, and while the growing perception that interest rates will remain high is slowly impacting price discovery, there is still room for prices to reach a point that would bring sales volumes in line with historical averages. Sources cited in this episode: CBRE: “Spiking 10-Year Treasury Rate Signals Caution for Commercial Real Estate” - https://www.cbre.com/insights/viewpoints/spiking-10-year-treasury-rate-signals-caution-for-commercial-real-estate Globe Street: “Maybe Secret Distress Is Behind CRE Market Performance” - https://www.globest.com/2023/08/29/maybe-secret-distress-is-behind-cre-market-performance/ Marcus & Millichap: “Are CRE Prices Still Too High?” - https://www.marcusmillichap.com/research/videos/are-cre-prices-still-too-high RealPage: “Multifamily Permitting Down by Almost One-Third” - https://www.realpage.com/analytics/multifamily-permitting-down-july-2023/ Fannie Mae: “Multifamily Economic and Market Commentary, August 2023” - https://www.fanniemae.com/media/48731/display For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Introducing Katrina Greene and The Complex
Katrina Greene is the Director of Property Management for Gray Residential, and her upcoming podcast, The Complex, will detail the complicated and crucial aspects of managing apartment properties.
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Interest Rate Uncertainty Slows Apartment Sales to a Crawl
Multifamily capital markets have seen the greatest drop in transaction activity compared to other CRE sectors, but all CRE markets have seen lower sales numbers in the current interest rate environment. As members of the Fed meet in Jackson Hole, the potential for an extended high-interest-rate regime could have a significant impact on commercial real estate. Sources discussed in this episode: All In Podcast: E142, "Real Estate Capital Crunch" - https://youtu.be/dlzobkV_CgU?si=kLdb9kKeuYO-Ch__&t=3695 Financial Times: “‘Higher-for-longer’ rate debate to dominate Jackson Hole meeting” - https://www.ft.com/content/ead217db-a833-4837-b2d7-dcc563a54f90 Freddie Mac: “Economic, Housing, and Mortgage Market Outlook – August 2023” - https://www.freddiemac.com/research/forecast/20230817-economic-housing-and-mortgage-market-outlook-august-2023 Colliers: “Capital Markets U.S. Snapshot | Q2 2023” - https://www.colliers.com/en/research/capital-markets-us-snapshot-q2-2023 Apartment List: “Rents Are Falling, but They're Falling Slower In the Suburbs” - https://www.apartmentlist.com/research/rents-are-falling-slower-in-the-suburbs For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.
Housing Demand, Homebuilders, and the Multifamily Market
Berkshire Hathaway's recent investment in homebuilding companies is a sound endorsement of the housing sector and continued strong demand for homes, and Warren Buffet's new focus is supported by decreasing building material costs and increased permitting and starts for single family home projects, indicating continued interest in purchasing a home, even as mortgage rates make home ownership more costly. Housing demand is highly correlated, and these signs of increased demand in the single family home space point to improved future performance in the multifamily market and a clear end of the current cooling period for the apartment market by 2024. Sources discussed in this episode: The Wall Street Journal: “Berkshire Hathaway’s Latest Bet: Homebuilder Stocks” - https://www.wsj.com/articles/berkshire-hathaways-latest-bet-homebuilder-stocks-9ef1478a John Burns Real Estate Consulting: “How Long Will Home Builder Euphoria Last?” https://jbrec.com/insights/how-long-will-home-builder-euphoria-last/ RealPage: “How Far is Each Market Past Peak Apartment Construction?” https://www.realpage.com/analytics/markets-past-peak-construction/ The New York Times: “Why This Company’s Financial Crisis Threatens China’s Economy” - https://www.nytimes.com/2023/08/15/business/country-garden-china-property.html For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Looking Beyond the 2023 CRE Market Cooldown
Mid-year updates and forecasts for the apartment and CRE markets uniformly note the improved economic conditions compared to the start of the year, but forecasts for rent growth and capital markets are diverging. Under one scenario, a recession in late 2023/early 2024 will prompt an interest rate reduction that could stimulate CRE capital markets, but under an alternative scenario, we are spared from a recession but deal with a longer period of elevated interest rates and inflation. Regardless of the ultimate outcome, interest rates are expected to remain high for at least 6 months, and the potential for property distress has not gone away.
Sources discussed in this episode:
Gray Capital: “CPI Rent Growth Contradicts Market Reality” - https://www.graycapitalllc.com/rent-report/
GlobeSt: “WeWork Says It is at Risk for Bankruptcy. Has Co-Working Died?” - https://www.globest.com/2023/08/09/wework-says-it-is-at-risk-for-bankruptcy-has-co-working-died/
National Bureau of Economic Research: “Converting Brown Offices to Green Apartments” - https://www.nber.org/system/files/working_papers/w31530/w31530.pdf
TheRealDeal: “Office-to-resi conversions are financially feasible, but just barely: report” - https://therealdeal.com/new-york/2023/08/08/report-identifies-nyc-offices-ripe-for-resi-conversion/
CBRE: “Midyear Global Real Estate Outlook 2023” - https://www.cbre.com/insights/books/midyear-global-real-estate-market-outlook-2023/economic-outlook
RealPage: “As Annual Rent Growth Slips Below 1%, How Much Further Could Rents Cool?” - https://www.realpage.com/analytics/july-2023-apartment-market-update/
Institutional Property Advisors: “Midyear Multifamily Outlook” - https://www.institutionalpropertyadvisors.com/research/special-report/2023/08/ipa-midyear-multifamily-outlook-special-report
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/
Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter
DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
What's Driving the Apartment Market?
Rent growth trends continue to moderate from last year's historic peak, and many of the top markets of last year have seen much lower rent growth due to the influx of apartments. Strong GDP numbers and a healthy job market, however, support continued housing demand and economic stability despite the elevated interest rate environment.
Sources discussed in this episode:
CoreLogic: “US Home Price Insights – August 2023” - https://www.corelogic.com/intelligence/us-home-price-insights-august-2023/
The White House: “Biden-Harris Administration Announces Actions to Lower Housing Costs and Boost Supply” - https://www.whitehouse.gov/briefing-room/statements-releases/2023/07/27/biden-harris-administration-announces-actions-to-lower-housing-costs-and-boost-supply/
GlobeSt: “Converting Office & Retail to Affordable Housing May Soon Be Easier” - https://www.globest.com/2023/07/28/converting-office-retail-to-affordable-housing-may-soon-be-easier/
RealPage: “Stellar 2Q Apartment Demand in Key Markets” - https://www.realpage.com/analytics/markets-solid-2nd-quarter-demand/
RealPage: “Multifamily Development is Definitely Slowing” - https://www.realpage.com/analytics/multifamily-permits-declining-june-2023/
Berkadia: “2023 Mid-Year National Report” - https://base.berkadia.com/wp-content/uploads/2023/07/Berkadia-Midyear-2023-Multifamily-Report-National-1.pdf
JLL: “JLL unveils first GPT model for commercial real estate” - https://www.us.jll.com/en/newsroom/jll-unveils-first-gpt-model-for-commercial-real-estate
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Predictions for H2 2023: The Economy and the Apartment Market
The Federal Reserve raised the federal funds rate by 0.25%, and while Federal Reserve staff "are no longer forecasting a recession," others are more confident in a recession as the inevitable product of this lengthy period of elevated interest rates. Amidst this continuing economic uncertainty, the multifamily market has shown solid demand. That being said, nationwide rent growth projections are more subdued compared to historical averages, but Northeast and Midwest markets continue to outperform. Sources discussed in this episode: Federal Reserve Bank of the United States: "Federal Reserve Issues FOMC Statement" - https://www.federalreserve.gov/newsevents/pressreleases/monetary20230726a.htm MarketWatch: “‘No chance we’re having a soft landing’: Stock-market strategist David Rosenberg gives Powell’s Fed no credit — and no mercy” - https://www.marketwatch.com/story/no-chance-were-having-a-soft-landing-stock-market-strategist-david-rosenberg-gives-powells-fed-no-credit-and-no-mercy-52ea2ed6 Nature: "Negativity drives online news consumption" - https://www.nature.com/articles/s41562-023-01538-4 The Conference Board: “US Leading Indicators” - https://www.conference-board.org/topics/us-leading-indicators Fannie Mae: “Multifamily Economic and Market Commentary, July 2023” - https://www.fanniemae.com/media/48391/display CBRE: “Cap Rates for Multifamily Stabilize for Q2” - https://www.cbre.com/insights/briefs/cap-rates-for-prime-multifamily-assets-stabilize-in-q2 For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.
Rental Housing Resists Office Downturn
While there has been more optimism about the economy generally, apartment rent growth continues its moderation on a national level, with some notable regional variation. Unlike more costly markets in the West and South, recent apartment rent growth reporting highlights the consistent growth of more affordable multifamily markets in the Midwest, a trend that also extends to the homebuying market. Sources discussed in this episode: Yardi Matrix: “National Multifamily Report, June 2023” - https://www.yardimatrix.com/publications/download/file/4192-MatrixMultifamilyNationalReport-June2023 McKinsey: “Empty spaces and hybrid places: The pandemic’s lasting impact on real estate” - https://www.mckinsey.com/mgi/our-research/empty-spaces-and-hybrid-places#/ National Association of Home Builders: “Homeownership across US Counties” - https://eyeonhousing.org/2023/07/homeownership-across-us-counties/ Harvard Joint Center for Housing Studies: “8 Facts About Investor Activity In The Single-Family Rental Market” - https://www.jchs.harvard.edu/blog/8-facts-about-investor-activity-single-family-rental-market For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
What Will Move Apartment Demand in 2023?
The CPI recorded another substantial drop in inflation, which should ease some financial burdens for renters and could act as a signal to the Federal Reserve Bank that interest rates need not increase any further. The resumption of student loan repayments this August could have a more direct impact on apartment demand, and three separate reports this week review the implications of student loan repayment on the multifamily market, housing, and the economy more broadly. Link to sources discussed in this episode: Bureau of Labor Statistics: “Consumer Price Index, June 2023” - https://www.bls.gov/news.release/cpi.nr0.htm Federal Reserve Bank of New York: “Where Is Inflation Persistence Coming From?” - https://libertystreeteconomics.newyorkfed.org/2023/07/where-is-inflation-persistence-coming-from/ John Burns Research & Consulting: “Student Loan Restart Will Drag on Economy” - https://jbrec.com/insights/student-loan-restart-will-drag-on-economy/ Education Data Initiative: "Student Loan Debt Statistics" - https://educationdata.org/student-loan-debt-statistics Moody's Analytics: "Resuming Student Loan Payments May Exacerbate Affordability Crisis and Pressure Retail Sector" - https://cre.moodysanalytics.com/insights/cre-news/resuming-student-loan-payments-may-exacerbate-affordability-crisis-and-pressure-retail-sector/ Fannie Mae: “Consumer Confidence in Housing May Have Plateaued” - https://www.fanniemae.com/research-and-insights/surveys-indices/national-housing-survey RealPage: “Apartment Demand Rebounds as Rent Growth Further Cools” - https://www.realpage.com/analytics/us-apartment-demand-rebounds-2nd-quarter/ Apartment List: "National Rent Report, June 2023" - https://www.apartmentlist.com/research/national-rent-data For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.
Is the Fed Planning on CRE Distress?
The multifamily market continues to steadily improve, with solid underlying fundamentals but softer demand in areas that have seen a major influx of supply, a situation that lines up with the mixture of positive and negative indicators for the broader housing market and for the economy as a whole. Both home prices and rents have recently shown negative year-over-year numbers, but they are increasing on a monthly basis and are showing greater strength as the summer months continue. Sources covered in this episode: Harvard Joint Center for Housing Studies: The State of the Nation’s Housing 2023 - https://www.jchs.harvard.edu/state-nations-housing-2023 Fannie Mae: “Mixed Data Muddles Macroeconomic Forecast” - https://www.fanniemae.com/research-and-insights/forecast/mixed-data-muddles-macroeconomic-forecast CBRE: “Multifamily vacancy poised to rise in all major markets” - https://www.cbre.com/insights/briefs/cotw-multifamily-vacancy-poised-to-rise-in-all-major-markets GlobeSt: "Expenses Rising Faster Than Revenues for Many Apartment Owners" - https://www.globest.com/2023/06/16/expenses-rising-faster-than-revenues-for-many-apartment-owners/ RealPage: “Apartment Residents Shopping at a Seasonally Normal Rate” - https://www.realpage.com/analytics/apartment-renters-shopping-normally/ Freddie Mac: “Housing Sentiment in the Second Quarter of 2023” - https://www.freddiemac.com/research/consumer-research/20230621-housing-sentiment-2Q23 NAR: “Realtors Confidence Index, May 2023” - https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index CoreLogic: “US CoreLogic S&P Case-Shiller Index Posts a Small Annual Decline, Down by 0.2% in April” - https://www.corelogic.com/intelligence/us-corelogic-sp-case-shiller-index-posts-a-small-annual-decline-down-by-0-2-in-april/ Harvard University: "The Power of Proximity: Office Interactions Affect Online Feedback and Quits, Especially for Women and Young Workers" - https://scholar.harvard.edu/pallais/publications/power-proximity-office-interactions-affect-online-feedback-and-quits-especially Nature: "The effects of remote work on collaboration among information workers" - https://www.nature.com/articles/s41562-021-01196-4 For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.
A Full Account of the Housing Market in 2023
The multifamily market continues to steadily improve, with solid underlying fundamentals but softer demand in areas that have seen a major influx of supply, a situation that lines up with the mixture of positive and negative indicators for the broader housing market and for the economy as a whole. Both home prices and rents have recently shown negative year-over-year numbers, but they are increasing on a monthly basis and are showing greater strength as the summer months continue. Sources covered in this episode: Harvard Joint Center for Housing Studies: The State of the Nation’s Housing 2023 - https://www.jchs.harvard.edu/state-nations-housing-2023 Fannie Mae: “Mixed Data Muddles Macroeconomic Forecast” - https://www.fanniemae.com/research-and-insights/forecast/mixed-data-muddles-macroeconomic-forecast CBRE: “Multifamily vacancy poised to rise in all major markets” - https://www.cbre.com/insights/briefs/cotw-multifamily-vacancy-poised-to-rise-in-all-major-markets GlobeSt: "Expenses Rising Faster Than Revenues for Many Apartment Owners" - https://www.globest.com/2023/06/16/expenses-rising-faster-than-revenues-for-many-apartment-owners/ RealPage: “Apartment Residents Shopping at a Seasonally Normal Rate” - https://www.realpage.com/analytics/apartment-renters-shopping-normally/ Freddie Mac: “Housing Sentiment in the Second Quarter of 2023” - https://www.freddiemac.com/research/consumer-research/20230621-housing-sentiment-2Q23 NAR: “Realtors Confidence Index, May 2023” - https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index CoreLogic: “US CoreLogic S&P Case-Shiller Index Posts a Small Annual Decline, Down by 0.2% in April” - https://www.corelogic.com/intelligence/us-corelogic-sp-case-shiller-index-posts-a-small-annual-decline-down-by-0-2-in-april/ Harvard University: "The Power of Proximity: Office Interactions Affect Online Feedback and Quits, Especially for Women and Young Workers" - https://scholar.harvard.edu/pallais/publications/power-proximity-office-interactions-affect-online-feedback-and-quits-especially Nature: "The effects of remote work on collaboration among information workers" - https://www.nature.com/articles/s41562-021-01196-4
For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.
Will a Sinking Office Market Drag Down Multifamily?
With office real estate suffering as remote working arrangements persist and drive down demand for office space, there is increasing attention on the broader impacts and knock-on effects related to the shift away from the office. Commercial real estate lenders have yet to panic, even in this environment of high interest rates and low transaction volumes, and while multifamily valuations have also suffered due to high rates, the same work-from-home factors that are hurting office CRE performance could support more consistently elevated values for residential real estate. Sources covered in this episode: Commercial Property Executive: “Servicing, Defaults Dominate CREFC Discussion” - https://www.commercialsearch.com/news/servicing-defaults-dominate-crefc-discussion/ The New York Times: “Return to Office Enters the Desperation Phase” - https://www.nytimes.com/2023/06/20/business/return-to-office-remote-work.html Moody’s Analytics: “Capital Market Quick Take: What Does It Take to See a Peak-to-Trough Office Value Decline of 40%?” https://cre.moodysanalytics.com/insights/cre-news/capital-market-quick-take-what-does-it-take-to-see-a-peak-to-trough-office-value-decline-of-40/ John Burns Research and Consulting: “Will the strongest housing demand surge in 20 years continue?” - https://jbrec.com/insights/will-strongest-housing-demand-surge-continue/ Axios: “America's housing shortage is keeping home prices high” - https://www.axios.com/2023/06/20/housing-shortage-prices-high Indiana Business Review: “Uncertainty in the national real estate market” - https://www.ibrc.indiana.edu/ibr/2023/summer/article2.html For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/ Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.