July 30, 2016

Brighton Mgmt Acquires Almont Towers in Beverly Hills


Domino Realty sold the Almont Towers apartments at 133 N. Almont Dr. in Beverly Hills, CA for $15.4 million or about $812,000 per unit.

The 19-unit multifamily property offers a fitness center and swimming pool.

Richard Ringer with Marcus Millichap represented the seller.

For more information on this transaction, please see CoStar COMPS #3640916.

Article source: http://www.costar.com/News/Article/Brighton-Mgmt-Acquires-Almont-Towers-in-Beverly-Hills/183603?ref=/News/Article/Brighton-Mgmt-Acquires-Almont-Towers-in-Beverly-Hills/183603&src=rss

Homeownership Dips to All-Time Low

Homeownership rates, which have been declining since
the end of the housing boom, hit an all-time low in the second quarter of
2016
.  The rate at the end of the period
was 62.9 percent on a non-seasonally adjusted basis compared to 63.5 percent in
the first quarter and 63.4 percent in the second quarter of 2015. This
information was contained in the Residential Vacancies and Homeownership report
for the second quarter issued by the U.S. Census Bureau.

There is some seasonality to homeownership rates and
the seasonally adjusted rate for the quarter was 63.1 percent compared to 63.5
percent the first quarter and 63.6 percent a year earlier.  It was also the lowest seasonally adjusted
rate on record.

The Census Bureau only began collecting data on
homeownership in 1995
The unadjusted rate peaked at 69.2 percent in both the second and the
fourth quarters of 2004 and has trended downward since then. 

 

 

Homeownership was highest in the Midwest at 67.7
percent and lowest in the West at 57.9 percent. 
The rate in the Northeast was 59.2 percent and in the South 64.8
percent.  The rate was down
year-over-year in all four regions and down for the quarter in all but the
South where it was unchanged.

Homeownership increases with each age group, ranging
from 34.1 percent for those under age 35 to 77.0 percent for those over age
65
.  The rate declined from Q1 for every
age group and was down year over year for all but those 35 to 44 years of age.

The Bureau also reported that the vacancy rate for
both rental and owner residential properties has stabilized after spiking
during and immediately after the Great Recession.  The rate for rental housing was 6.7 percent,
statistically unchanged from the second quarter of 2015 and the homeowner
vacancy was 1.7 percent, also unchanged.

 

 

The Bureau estimates there were 135.5 million housing
units in the U.S. at the end of the second quarter, an increase of about
815,000
in a year.  Approximately 74.4
million of those units were owner occupied and 43.9 million were rented.  That left 17.20 million vacant, many of which
are seasonal properties, held off of the market, or held for occasional occupancy
by the owner or others.  Only about 5.5
million units were available for either sale or rent.

The median asking price for a vacant home for sale in
the second quarter was $164,500, up significantly from 2012 but well below the
$200,000 plus level reached in 2006-2007. 
The median asking price for a vacant rental was $847, down slightly from
the first quarter but near an all-time high.

 

 

Article source: http://www.mortgagenewsdaily.com/07292016_vacancies_and_homeownership.asp

U.S. Office Sector Enjoys Steady Q2 Leasing Momentum Even as Rent Growth Slows, Sales Stall

The U.S. office market continued its steady momentum in the second quarter, recording 39.4 million square feet of net absorption in the first six months of 2016, nearly equaling the 40.2 million square feet absorbed during the record-setting first half of last year.

The U.S. office vacancy rate ticked down another 15 basis points to 10.6% in the second quarter of 2016, well below the long-term historical vacancy rate of 11.3%. CoStar analysts expect the office vacancy rate to continue trending lower before bottoming out at around 10.2% in 2018, about the same as lowest point of the last real estate cycle.

“Basically, we expect to have two more years of occupancy recovery in the office market,” noted Walter Page, CoStar’s director of office research, who presented the Mid-Year 2016 Office Review and Forecast along with Hans Nordby, managing director for CoStar Portfolio Strategy and CoStar senior real estate economist Paul Leonard.

Several markets showed marked improvement at mid-year, including ones that were previously struggling, such as Phoenix, which posted positive absorption of 3.4 million square feet.

In Seattle, which has enjoyed a particularly strong run, Amazon’s ongoing expansion helped drive 3.1 million square feet in net absorption. Even Washington DC saw a welcome return of strength in the second quarter after several years of flat demand growth. The D.C. office market absorbed a respectable 2.3 million square feet over the last four quarters.

“Finally, we’re starting to see some momentum in the D.C. marketplace, which should allow the vacancy numbers to start inching downward,” said Page.

There were several notable exceptions. The energy sector slowdown and corporate relocations related to the completion of several pending build-to-suit projects played a role in Houston and Dallas, which recorded absorption declines of 2.4 million and 3.7 million square feet, respectively, since mid-year 2015. San Francisco, Raleigh, Boston and San Diego also logged declines due to a variety of factors.

But for the most part, the vast majority of office submarkets — 66% — saw their office vacancy decline in the second quarter, and more than half of all U.S. office submarkets have a lower vacancy rate than during the previous market peak in 2006-2007.

Demand for High Quality Space Resulting in Limited Supply

In a theme seen in many markets across the country, the supply of available space in newer, higher-quality office buildings is becoming increasingly limited. With relatively little new development in the pipeline based on historical levels, only about 81 million square feet of space is available today in buildings constructed over the last 10 years.

That total is less than half the 167 million square feet of vacant newer space that was available in 2007, according to CoStar’s analysis.

“While there are some exceptions where plenty of high quality, new office space remains available, such as Houston and Washington, DC, for the most part we’re really tight on nice, new space,” noted Page.

Click to Expand. Story Continues Below

As evidence, Page noted that the vacancy rate for 4- and 5-Star office properties remained unchanged at 11.7%, despite the fact that 90% of the new office space added to the market falls into that category.

Suburban office markets also continued to see increasing activity as large blocks of high-quality space become harder to find — and more expensive — in most major markets, with the exception of Los Angeles, Seattle, Chicago and Atlanta, where large blocks of downtown space remain readily available.

“Part of the story is that it’s now the suburbs’ turn in the cycle, and part of it is that the CBDs were so successful earlier in the recovery cycle that there’s no place left to grow,” Nordby said.

As investors begin to focus on which markets are the most recession-resistant in the later innings of the recovery, certain niches such as medical office space stand out, Nordby said.

Demand growth is nearly twice as strong for medical office as for regular office, and over the long term, medical office has grown at about 1.3% annual rate compared to 0.7% for the broader office market, Page said. The medical office sector, which has never had negative demand growth, even during the two recessionary periods since 2000, had a midyear vacancy rate of 8% compared to the broader market’s 10.6%.

Click to Expand. Story Continues Below

Office construction stayed flat in the second quarter at about 130 million square feet under way, due in part of a large decline in Houston. But building activity is still slightly above its long-term average of 125 million square feet, with increased construction in D.C. and Atlanta, among other metros.

Some Cautionary Yellow Flags

While leasing and absorption levels remain robust and construction still well below historic levels, the U.S. office market did see some cautionary flags in the second quarter, including a big slowdown in office sales activity and the beginning of a slowdown in rent growth.

CoStar is projecting office rent growth will likely finish the year at an average of 3.4% and decelerate to the low 3% range over the next year. As with all trends, there will likely be a few exceptions, including the Nashville, Atlanta and Florida markets, where lower rents earlier in the cycle have limited construction. Also, rent growth in CBDs is expected to continue to outpace suburban markets.

Meanwhile, reflecting declines across all the property types, the volume of office sales completed in the first half of 2016 declined compared to the same period one year earlier, according to preliminary CoStar data.

“It’s a worry,” Nordby said. “A decrease in transaction volume generally portends a decrease or at least a flattening in prices.”

And in another historical sign of softening demand, rising levels of surplus space placed on the sublease market by tenants, is rising in a few markets. In Houston, the contraction of large energy tenants has caused sublet space to balloon to more than 3.5% of total inventory. Companies such as Shell, ConocoPhillips, and BP have each put 500,000 square feet on the sublet market in recent quarters.

Article source: http://www.costar.com/News/Article/US-Office-Sector-Enjoys-Steady-Q2-Leasing-Momentum-Even-as-Rent-Growth-Slows-Sales-Stall/183648?ref=/News/Article/US-Office-Sector-Enjoys-Steady-Q2-Leasing-Momentum-Even-as-Rent-Growth-Slows-Sales-Stall/183648&src=rss

EverBank in Talks to Be Acquired for $2.5 Billion

EverBank Financial Corp. said it is in advanced negotiations with a financial services firm to be acquired for roughly $2.5 billion, potentially leading to one of the biggest banking takeovers since the financial crisis.

The online lender said investors would receive $19.50 a share under the terms being discussed, though it didn’t identity the other party. EverBank cautioned that a deal isn’t certain and the terms may change,…

Article source: http://www.wsj.com/articles/everbank-in-talks-to-be-acquired-for-19-50-a-share-1469530622?mod=residential_real_estate

MBS RECAP: Fed Wasn’t Hawkish Enough to Scare Bonds

Dovish vs Hawkish: This refers to how accommodative the Fed’s policy stance might be.  Have you ever seen a hawk stare down its prey?  That’s how a hawkish Fed looks at inflation (i.e. “I’m really close to swooping in and killing that!”).  Doves, on the other hand–well… I don’t know what doves do, but I know they’re not hawkish!

When it came to today’s FOMC announcement, the Fed had a chance to send a clear signal on their rate hike intentions (if they had any).  While they did dial up the hawkishness just a bit, they stopped short of the sort of overt telegraph seen in last October’s meeting (when they said “in considering whether it will be appropriate to raise [rates] at its next meeting”).  

As such, markets (led by word-parsing computer programs) spent the first few seconds reacting to the more hawkish parts of the statement.  The Fed thinks the economy is doing better?  Sell bonds!  But when the clear telegraph was nowhere to be found, human decision makers said “no… BUY bonds!”  And buy they did.  10yr yields traded all the way down to 1.50 and Fannie 3.0s added nearly 3/8ths of a point versus yesterday’s latest levels.  

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/642164.aspx

Excess Rooms Push Hotel Owners to Cut Rates in China

A glut of hotel rooms in Chinese cities is forcing owners to reduce rates in a bid to attract customers.

As many as four in 10 rooms in China have been sitting empty as a result of overexpansion by hotel chains, according to an estimate from Fitch Ratings in December.

That, in turn, is prompting companies to cut prices. Across China in the first half of 2016, hotel revenue per available room, or revpar, declined 0.7% from the…

Article source: http://www.wsj.com/articles/excess-rooms-push-hotel-owners-to-cut-rates-in-china-1469544134?mod=residential_real_estate

Excess Rooms Push Hotel Owners to Cut Rates in China

A glut of hotel rooms in Chinese cities is forcing owners to reduce rates in a bid to attract customers.

As many as four in 10 rooms in China have been sitting empty as a result of overexpansion by hotel chains, according to an estimate from Fitch Ratings in December.

That, in turn, is prompting companies to cut prices. Across China in the first half of 2016, hotel revenue per available room, or revpar, declined 0.7% from the…

Article source: http://www.wsj.com/articles/excess-rooms-push-hotel-owners-to-cut-rates-in-china-1469544134?mod=residential_real_estate

Legend 3D Leases 28,000 SF at Columbia Square

Legend 3D, a virtual reality and 3D visual effects company, signed an 11-year lease for 27,930 square feet in the Columbia Square office building at 1550 El Centro Ave. in Los Angeles, CA.

The five-story building totals 106,132 square feet in the Columbia Square mixed-use development. The office building delivered in February 2016 by Kilroy Realty Corporation. Legend 3D will take up occupancy in December, more than doubling the space it currently occupies.

Jacob Bobek and Aaron Wilder with Avison Young represented the tenant. Nicole Mihalka, Carl Muhlstein, Hayley Blockley and Christian Kasparian with JLL represented the landlord.

Article source: http://www.costar.com/News/Article/Legend-3D-Leases-28000-SF-at-Columbia-Square/183576?ref=/News/Article/Legend-3D-Leases-28000-SF-at-Columbia-Square/183576&src=rss

Legend 3D Leases 28,000 SF at Columbia Square

Legend 3D, a virtual reality and 3D visual effects company, signed an 11-year lease for 27,930 square feet in the Columbia Square office building at 1550 El Centro Ave. in Los Angeles, CA.

The five-story building totals 106,132 square feet in the Columbia Square mixed-use development. The office building delivered in February 2016 by Kilroy Realty Corporation. Legend 3D will take up occupancy in December, more than doubling the space it currently occupies.

Jacob Bobek and Aaron Wilder with Avison Young represented the tenant. Nicole Mihalka, Carl Muhlstein, Hayley Blockley and Christian Kasparian with JLL represented the landlord.

Article source: http://www.costar.com/News/Article/Legend-3D-Leases-28000-SF-at-Columbia-Square/183576?ref=/News/Article/Legend-3D-Leases-28000-SF-at-Columbia-Square/183576&src=rss

Facebook’s Answer to Silicon Valley Housing Crunch: Build Apartments

Concerns about Silicon Valley’s housing shortage are turning the world’s leading social media company into an apartment developer.

Fast-growing Facebook Inc. is in the midst of a push to expand its headquarters complex in its hometown of Menlo Park, Calif., a plan for 6,500 new employees that has rankled some locals frustrated with crowding.

Article source: http://www.wsj.com/articles/facebooks-answer-to-silicon-valley-housing-crunch-build-apartments-1469534402?mod=residential_real_estate