November 24, 2014/Real Estate and Construction
Real Estate Monitor – Winter 2014
Capital flow, both equity and debt, continues to find superior returns in the self storage sector. Based on total returns by property sector published by NAREIT, self storage outperforms other core sectors such as apartment, office, retail, industrial and office with five-, 10- and 15-year returns of 18.85 percent, 20.48 percent and 16.54 percent, respectively.
September 24, 2014/Real Estate and Construction
Real Estate Monitor – Fall 2014
A micro-apartment is generally considered to be a one-room, selfcontained living space. It is designed to accommodate sitting and sleeping spaces, a bathroom and a kitchenette, and it usually occupies between 150 and 370 square feet. In population-dense cities such as New York, Washington, D.C., and Chicago, the demand for such spaces is growing. However, builders face unique design challenges in making these smaller units appealing to prospective tenants. In order to develop these apartments, builders must balance efficient use of space, contend with handicapped and zoning regulations, while at the same time making the units energy-efficient and aesthetically appealing.
June 24, 2014/Real Estate and Construction
Real Estate Monitor – Summer 2014
The BDO RiskFactor Report for REITs is a yearly study that analyzes the risk factors cited by the 100 largest publicly traded REITs in the U.S. in their most recent 10-K filings. The study, which is now in its third year, examines the most commonly noted risks and ranks them by order of frequency cited.
March 24, 2014/Real Estate and Construction
Real Estate Monitor – Spring 2014
Wells Fargo, the largest U.S. mortgage lender, is slowly getting back into making subprime home loans. The bank is looking for opportunities to increase revenue, as overall mortgage lending volume declines. It believes it has dealt with its prior mortgage problems, particularly with U.S. home loan agencies, to be able to extend credit to borrowers who may have a higher risk profile. These steps by the bank could amount to a substantial change for the subprime mortgage market that brought the banking system to the brink of collapse. Since the recent financial crisis, banks have been reluctant to lend mortgage money to borrowers, except to those deemed to be the safest.
November 24, 2013/Real Estate and Construction
Real Estate Monitor – Winter 2013
There is little doubt that since the debt crisis of 2007 to 2009, the most serious since the Great Depression, U.S. real estate has experienced a significant recovery despite continuing uncertainty in domestic and international financial markets. Of note, the CMBS market, which marked the beginning of the recession with a series of significant failures, appears to have finally stabilized to the point where several new CMBS pools have recently been oversubscribed.
September 24, 2013/Real Estate and Construction
Real Estate Monitor – Fall 2013
One of the most familiar terms in real estate in connection with the purchase of real property is due diligence. “Due diligence” means conducting an appropriate investigation into the legal rights and encumbrances, physical structure, and financial operations of the real property to be acquired by the purchaser. The object is to find out all about the property by relying on all sources of information. What amount of diligence is “due” depends upon the circumstances, including the risks created by the prior use of the property, the monetary value of the transaction, and the available budget. Ultimately, the process should provide the acquirer with a reasonable level of confidence that they are aware of all material items affecting the property including those matters not disclosed to the buyer. For instance, the seller may not be aware of certain zoning rights and easements if the seller operated the property with no intention to redevelop the property, but the buyer intends on demolishing the existing facility to construct a larger complex.
November 24, 2012/Real Estate and Construction
Real Estate Monitor – Winter 2012
The past few years have seen an accelerating number of registration statements being filed for nonexchange- traded real estate investment trusts, or “non-traded REITs.” Just what are non-traded REITs and how do they differ from listed REITs?
September 24, 2012/Real Estate and Construction
Real Estate Monitor – Fall 2012
As the condition of the global economy continues to cause uncertainty across all industries, The Counselors of Real Estate, an international professional association of top real estate executives, asked its members to identify the top 10 broad structural issues that will define the real estate industry over the next 10-30 years. They are briefly described below
June 24, 2012/Real Estate and Construction
Real Estate Monitor – Summer 2012
For the buyer, a PMM can be a primary source of financing (eliminating the need to negotiate for a mortgage with a third party) or a secondary source of financing (enabling the buyer to take advantage of an assumable first mortgage on the property). For the seller of real estate with an assumable mortgage with desirable terms, a PMM may enable the seller to obtain a higher selling price. The seller also may view a PMM on sound property to be a desirable investment, providing a higher return than that obtainable if cash proceeds are to be reinvested. Finally, a PMM may have tax advantages to the seller, enabling gain to be recognized only as installment payments are received.
March 24, 2012/Real Estate and Construction
Real Estate Monitor – Spring 2012
It is expected that mezzanine financing, which fills the gap between senior financing and equity, will play a major role in the next few years as short-term mortgages come due in what continues to be a weak market. As senior lenders continue to be more conservative in renewing mortgages, borrowers will need to find cash from other sources. This will serve to create good opportunities for mezzanine lenders.
