5 at 5: Your Daily Digest for Real Estate Investing, 2/24/21


The New York Times says [subscription required] that industry experts are starting to take heed as disruptions from the pandemic and changing technological needs are hastening the demise of commercial real estate developments.

The Millionacres takeway: The dilemma: How to build for today without becoming obsolete tomorrow. The questions are just now emerging, and the answers may well need to be part of CRE investors’ thinking sooner than later.

Bloomberg reports [subscription required] that a Times Square retail property owned by the family company of former presidential advisor Jared Kushner is a step closer to foreclosure.

The Millionacres takeway: The former New York Times building was appraised at $470 million in 2016 and then $92.5 million last year. Lenders include Deutsche Bank (NYSE: DB) and SL Green Realty (NYSE: SLG), a prominent real estate investment trust (REIT). This saga is of interest not only because of who it is, but because of where it is. More bad news from midtown Manhattan.

Increased liquidity, tighter credit spreads, and somewhat looser underwriting standards led to “a sharp improvement” in commercial real estate lending in the fourth quarter, according to CBRE’s (NYSE: CBRE) latest Lending Momentum Index.

The Millionacres takeway: CBRE’s head of debt and structured finance for capital markets told Commercial Property Executive that “lenders of all sizes and types are ready to finance commercial and multifamily properties in 2021.” Sounds like borrowers that meet muster for somewhat tighter underwriting standards can get the money they need to jump-start their personal economies and the macro one we all live and work in.

Both the S&P CoreLogic Case-Shiller Home Price Indices and the Federal Housing Finance Agency (FHFA) House Price Index show home prices have jumped more than 10% since the end of 2019. According to the FHFA, it's the largest annual gain in the history of the agency's index.

The Millionacres takeway: Our Aly Yale says that with prices on the rise, your existing properties are gaining value. If you're on the hunt for a new investment, though, expect a seller’s market. Then she links to some tips that could help you win a bidding war.

Founded only a year ago, NYCE became the fastest real estate company to raise $1 million through Regulation Crowdfunding (Reg CF). This was step one on the company's mission "to create 100,000 millionaires of color through access to prime real estate assets."

The Millionacres takeway: Our Jeffrey Piltch explains the nitty-gritty of Reg CF and says that while the funding mechanism can create a real push toward addressing inequities, due diligence is also in order when considering deals in which to invest.