Brent Jenkins

“You can’t buy back all of your interest on any given day because where would you get the money to do that if it’s all sitting in illiquid real estate?” #NAV #REITS: Excellent quick read from Urban Land Institute, citing ADISA's L&R Co-Chair and President-Elect John Grady, clearing up misinformation regarding Non-Traded REITS. "NTRs...were never meant to be liquid. Unlike volatile funds that trade on exchanges, NTRs were designed to give investors stable, long-term returns and allow issuers the ability to wait out the market and sell assets only at peak prices. Commercial property assets are, after all, much different from stocks by being fundamentally illiquid." https://lnkd.in/ezMimHYR

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Office-to-resi conversions may be a hot topic, but they’re hardly a new idea. This recent article from The New Yorker interviews Nathan Berman of Metro Loft Management in New York— a firm that has been converting office buildings to apartments since 1997. What used to be a niche business model is now highly sought after by some of the largest real estate investors in the nation. As someone at the forefront of office-to-resi conversions in #Seattle, a few things stood out to me in this article: - By utilizing existing structures, developers can often create more livable space than if they were to develop a new building, due to current zoning restrictions. - Dependent on cost basis in the existing structure, the lesser cost of repurposing an old building can allow rental prices to be set lower than they would be in a new one. - These projects are good for the planet. According to a recent paper by the National Bureau of Economic Research, converting an office building into apartments can increase its energy efficiency by as much as 80%. What do you think of conversions as a concept? What will the ripple effects be thru our economy and society if we don’t start to convert? https://lnkd.in/dSdJR3Yg #officetoresi #CRE #sustainability #conversion #adaptivereuse

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EQT Exeter Expands Footprint in Suburban Boston. A California-based real estate investment firm with a national portfolio of light industrial real estate, sold a pair of distribution centers in Taunton, Massachusetts, to EQT Exeter, the industrial real estate firm formed two years ago through the acquisition of Exeter Property Group by Swedish investment manager EQT AB. The two buildings traded for $37.35 million, or approximately $202.45 per square foot. The assets involved in the sale are located in the Myles Standish Industrial Park and were reported to be fully leased at the time of closing. They include 385 Myles Standish Blvd., 141,990-square-foot manufacturing facility that was recently leased by WorldPac, a wholesale distributor of automotive parts. It sold for an allocated $30.46 million. The other building at 295 Constitution Dr., is listed as a 42,500-square-foot warehouse and sold for an aggregated $6.89 million. https://lnkd.in/g_zRm8b7 #industrialreaalestate #propertyinvestment #realestateinvestment #realestatefirm #warehouse #milliondollarlisting #industrialbuilding

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Accelerated Supply of Affordable Production Housing Act (ASAP), is the latest brainchild of Bronx Rep. Ritchie Torres to remove all bond cap limits from affordable housing until 2034. Roughly 20 states have exceeded their bond cap limits and the competition for the available funds is fierce. The senator believes this will allow for a doubling of affordable housing production. Bond cap directly plays into the delivery of 4% tax credit deals due to the 50% test. The 50% test stipulates that more than 50% of the financing for these deals come from bonds. To help provide some background. Low Income Housing Tax Credit (LIHTC) deals come in 2 types, 4% and 9%. (9% don't use bonds, different conversation) You calculate these by taking your total eligible basis (bricks and sticks plus soft costs) and multiply by the eligible percentage. Example: Basis of $10,000,000 x .04 = $400,000 per year for 10 years or $4,000,000 in tax credits. These are then sold to an equity provider (right now for about $0.85, so $1,000,000 in tax credits = $850,000 in capital) in exchange for equity day one. The equity provider then takes the credits over the next 10 years. Which is why they tend to stay in the deal until all of those are paid back. Because the cost to build has gone up by 30-50% since 2019 but bond cap has not, those funds are not going as far. Thus, not only are they competitive, but the number of units that they provide has decreased. Another proposed solution to this problem has been reduction of the 50% test to a 25% test, but it hasn't gotten much traction. I'm not so sure that this will be the panacea the senator is expecting. Because ultimately, if we double the amount of tax credits, we have to have buyers for them. These buyers only buy to the extent that they have taxable liability that they need to offset. Therefore, unless taxes drastically increase, they have a capacity limit. Prior to the tax cuts during the Trump administration, tax credit prices were as high as $1.17. Barring massive tax increases the effect of a large increase in credits could dilute the entire pool. As a result, what we could see is a decrease in the price per credit, from the current .85 cents to say .50 cents. These prices dictate the amount of equity, which dictate whether a project "pencils." The only way I see the numbers working would be to increase the buyer pool for the credits. Current rules do not allow these credits to offset earned income. Which means they don't do any good for a doctor. If we amended those rules and thereby increased the buyer pool, then maybe we would actually see positive effects from increased bond cap and thus increased tax credit deals. https://lnkd.in/eutsJk6a

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Discover key insights from PRISM 2024! Manus Clancy outlines five reasons for optimism in the commercial real estate market. Learn more: https://lnkd.in/eN5P-6cP #LightBoxRE #PRISMPerspectives #PRISM24 #CRE #CommercialRealEstate

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Public incentives and private angst are combining to drive dozens of New York City office-to-residential conversions past the planning stages. Read the story: https://lnkd.in/eeE7ttra #RealEstate #CommercialRealEstate

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Public incentives and private angst are combining to drive dozens of New York City office-to-residential conversions past the planning stages. Read the story: https://lnkd.in/eeE7ttra #RealEstate #CommercialRealEstate

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📰Trepp, Inc. Chief Product Officer, Lonnie Hendry was interviewed by Therese Fitzgerald (Commercial Property Executive) yesterday at the CRE Finance Council Annual Conference in New York, dissecting the current distress in the CRE market... "Trepp’s May 2024 Delinquency Report was actually favorable, with CMBS delinquencies inching down to 4.97%. Even office, which had peaked at 7.38% in April, was down to 6.94% in May", said Hendry. "The market is performing better than the headlines would suggest, but there is a lot of distress that just hasn’t made it through the system yet. The CMBS market has about $30 billion of office loans maturing throughout the remainder of 2024 and a lot of those loans have very low debt yields in place, very low DSCRs and low occupancies relative to stabilized norms." Read the full write up here: https://hubs.li/Q02BnZsw0 #Trepp #CREFCJune2024 #CREFinanceCouncil #CREFC #CRE #CommercialRealEstate #CMBS #Conference #CREEvent #CREConference #CommercialPropertyExecutive #Office

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The commercial real estate industry has been facing a number of challenges these past few years.🏢 One challenge in New York City in particular, is the 95 million square feet of office space unoccupied. With the rise in hybrid or remote work, many offices stand empty. ❓ So how do commercial real estate owners attract tenants back? ❓ Our RVP, US Umair Ahmed dives into some ways commercial real estate owners might be able to attract tenants back: https://lnkd.in/dSbJ_2-3

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The most-read story from the previous week's Developer's Digest®, published by Crain's New York Business, covers office-to-residential conversions gaining traction in New York City as a solution to the housing shortage and office surplus, bolstered by a new state budget tax incentive. The Adams administration has launched a portal on the Department of Housing Preservation and Development's website detailing the program, which starts accepting applications later this year. Projects must begin between 2023 and July 2031 and be completed by December 2039, offering tax benefits lasting up to 35 years based on the project start date. To qualify, conversions must include at least six residential units, with 25% of the units being permanently affordable for households earning up to 100% of the area median income. At least 5% of these affordable units must serve households earning no more than 40% of the area median income, and the overall affordability average must not exceed 80%. Additionally, half of the affordable units must be two-bedroom units or larger, and no more than 25% can be studios. Conversions can occur citywide, with more substantial tax benefits for projects in Manhattan below 96th Street, where they will receive a 90% tax exemption initially, decreasing over time. To read more stories like this and to stay on top of the most recent news from the development world, subscribe to our Developer’s Digest® using the link below: https://bit.ly/3Qg1qXV #digest #dsa #nyc #weknowzoning #deveopmentsites #developmentnews

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Why Is Office-To-Residential Conversion So Difficult To Get Done? In NYC, there is a low availability rate of apartments and a glut of B and C-level office buildings with low occupancy. Perfect, right? So why is office-to-residential conversion occurring at such a relatively slow pace? This is true even with the recent announcement of the planned conversion of Pfizer headquarters to housing. Jonathan Miller, CRE®, Member of RAC described many of the issues in a recent HousingNotes article 'The Challenge Of Office-To-Residential Conversions – Red Stapler Edition'. These are his bullet points with broader explanations in the article here https://lnkd.in/efD5wcUx - More Time Needed - Construction Costs Are Higher - Large Floorplates Are Often Not Feasible - Most Municipalities Can’t Afford To Subsidize - Zoning Variances And Community Approvals - Vacancy Rates Are Misleadingly Low _____________________________________________ If You Are Buying A Home Or Commercial Property In New York State… Did You Know That Title Insurance Companies Are NOT All The Same, Including The Cost? And, it’s your RIGHT to choose the title company you want to use! That's Where Your Due Diligence Comes In! Read '10 Significant Ways That Hallmark Abstract Service Differentiates Itself From Many New York Title Insurance Providers!' here https://lnkd.in/edc79W4Y. Questions? Contact us at [email protected] or (516) 741-4723. Hallmark Abstract Service...You Buy Real Estate, We Protect It! #architect #housingaffordability #housing #development #titleinsurance #Manhattan #Manhattanrealestate #foreclosure #WFH #office #finance #mortgage #commercialrealestate #CRE #LongIsland #LongIslandrealestate

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On December 4, Manatt's Ted Hunter will moderate a panel at Markets Group's Real Estate Global Forum in New York. The "Building a Recession-Proof Portfolio" panel will discuss strategies for generating returns in 2025, structuring #realestate allocations, divesting certain investments, hedging risk over the next 12-24 months, and adjusting portfolio strategies to build resilience during a recession. To learn more and register, click here: https://lnkd.in/ezxF2i33

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CBRE Survey: Nearly 100% Of CRE Investors Plan To Invest More Heavily In Data Centers. Article by Olivia Lueckemeyer, Bisnow https://lnkd.in/eyZzSZCJ #landacquisition #alternativelending #realestate #privatelender #commercialrealestateloans #bridgefinancing #bridgeloans #seniorhousing #landloans #constructionloans #retailloans #loanservicing

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It’s not efficient to finance a $430 million project with small tranches of capital. And yet we are on Small Change. In early April 2024, Small Change, launched an investment opportunity into 22 Drydock Avenue in Boston’s Seaport district. The property is slated to be the city’s first life sciences building to achieve LEED Platinum and net-zero carbon emissions and has very lofty DEI goals. Related Companies (led by a woman) was selected a few years ago by the City of Boston to develop 22 Drydock, an R & D building to be fully occupied by Vertex Pharmaceuticals (led by a woman). And Boston Real Estate Inclusion Fund (BREIF), negotiated a small position ($3.75 million) in the $130 million equity stack required for the project. Put another way, they further diversified the capital stack from a single, big, diverse investor to now include multiple investors—over 40 women and people of color to date. While the offering is not exclusively available to that group, BREIF is using its network to target diverse capital. This is an opportunity to invest alongside the big boys. While (disappointingly) it is not open to non-accredited investors (you can take that up with the SEC), it is a very big step forward to providing opportunity where normally there is none. Read the Q & A or go to the listing (https://lnkd.in/eEUfdJhb). Be quick. BREIF is closing in rapidly on it's maximum funding goal. https://lnkd.in/eYcrHWRk _____________________________ This is not a solicitation of an offer to buy or sell any securities. All investing is risky and involves the risk of total loss as well as liquidity risk. Past returns do not guarantee future returns. If you are interested in investing, please visit SmallChange.co to obtain the relevant offering documents. ______________________________ 👋 I’m Eve 🌇 In love with cities. 🚀 Disrupting the status quo at SmallChange.co 🎧 Rethinking real estate. For good. Liked this post? Want to see more? 🔔 Click the bell on my Profile 👥 Send me a connection request  #commercialrealestate #socialimpact #BIPOC #impactinvesting #cities Kirk Sykes

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While the pandemic has cast a shadow on the future of office spaces, the current state of affairs is more nuanced than we think. There is a growing demand for high-quality office buildings in the right locations with access to good transportation links. This trend has been in motion even before COVID. With a continuing growing economy, as much as a quarter of the current office stock obsolete, and likely no new supply until the middle of the next decade, vacancy will tighten. https://lnkd.in/danEBFQq

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This is an interesting read. As residential demand remains strong, office demand remains weak, and the supply of functionally obsolete office properties remains high, we see more adaptive reuse projects in the pipeline. Yet, it's far from an 'easy recipe' for success.