Martin Muoto

Good piece by BofA on housing dynamics observed via their internal data: - Northeast and West Coast (SF, LA) still seeing net population outflows, albeit their data doesn’t include immigration inflows - South still gaining in population, and BofA questions if even all the new housing supply is enough to keep up with population - Gen Z driving the migration movements (though in the NE cities, it’s older folks moving out) - Interestingly, the makeup of migration within higher growth MSA’s is still skewing toward suburban areas of less density - Young BofA customers are seeking rental housing in near/immediate term, but homeownership still No 1 desired option, with majority saying they want to buy within 5 years (positive case for BTR) #housing #affordability #multifamily #BTR #BFR #rentgrowth #migration #housingsupply #realestate #CRE #realestateinvesting #BofA

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RELPI | Interests Aligned® hitting NYC meeting with Community Member Scott Arden CRE, Sentinel Real Estate! "Interests Aligned ®" is not just a tagline, it's what we do. For information about to get involved with the growing RELPI | Interests Aligned® Community, please contact us at [email protected]. For Investor and Consultant engagement, please contact Leigh Ann Hochman, Managing Director, Investor Relations at [email protected]. #RELPI® #Community #InterestsAligned® #modernmedia #relpiselfie

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Real Estate Talk with George Salas, Dr. Noel Liu & Tom Bibby Join me and real estate experts Dr. Noel Liu and Tom Bibby for an engaging discussion on the latest trends and strategies in real estate investing. Gain actionable insights and tips to navigate the market successfully. Tune in for this powerful session and elevate your investment knowledge!

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“… at least half of the banking system’s Tier 1 capital loss-absorbing capacity has already been consumed by unrealized interest rate losses on its assets.” “My estimates suggest that CRE loan losses as small as 10% could render over 700 banks holding more than 6.5% of all banking system assets market-value insolvent.” “Larger commercial real estate loan losses would inflict greater carnage on the banking system.” Paul Kupiec economist and senior fellow American Enterprise Institute The Hill The link to his full paper here: 👉 https://lnkd.in/gbt6vGTs “Many banks in the system are ill-prepared to absorb additional losses from commercial real estate loan defaults.” “Today, with 10-year Treasury rates over 4.4 percent, banks’ market-to-market losses are probably closer to $1.4 trillion.” “According to year-end 2023 regulatory data, the banking system had $2.1 trillion in total regulatory capital to provide loss-supporting capacity for about $23.7 trillion in reported assets.” “Commercial real estate loan concentrations and banks’ diminished capital loss-absorbing capacity have primed the system for a sequel to the 1980s Savings and Loan Crisis.” “Bank regulators measure bank commercial real estate loan concentration as the ratio of total bank commercial real estate loans to the sum of a bank’s Tier 1 regulatory capital plus its provisions for loan losses.” “Regulatory guidance identifies a commercial real estate concentration ratio above 3 as potentially excessive and deserving of additional examiner scrutiny.” “Using market value Tier 1 capital estimates in place of regulatory Tier 1 capital, as of year-end 2023, the number of banks with a commercial real estate concentration ratio greater than 3 swells to 2,667.” “These 2,667 banks manage 27 percent of all banking system’s total assets and include 231 banks with 0 or negative market value adjusted Tier 1 capital.” “The FDIC deposit insurance fund balance of $121.8 billion is equivalent to only 0.51 percent of the banking system’s total assets.” “The FDIC cannot manage hundreds of simultaneous bank failures.” “The FDIC deposit insurance fund balance of $121.8 billion is equivalent to only 0.51 percent of the banking system’s total assets.” “Commercial real estate concentrations and unrecognized bank interest rate losses have created systemic risk in the banking system, and it is hiding in plain sight.” 🍀🍀🍀

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In contrast to the doomsday scenario reported in some papers, data shows that #condominium/townhome prices are not crashing in #MiamiDade County. In the first half of 2024, the median sales price of condominium/townhome sales rose from one year ago in 84% of 31 areas (with at least 5 sales per month), with 39% posting double-digit price growth. Yes, home sales have fallen in most markets, but prices have remained relatively firm. Supply is building up, especially in luxury coastal areas, but that has not translated to steep price prices on a broad level. #Cash buyers make up at least over 70% of buyers in million-dollar markets like Surfside (site of the Champlain Towers collapse), Sunny Isles, Bay Harbor, Key Biscayne, and Bal Harbour. The condo law passed in 2022 (SB 4-D) is meant to make condos safe for residents, and buyers need take the future costs of ensuring structural integrity into account. But the new condo rules have not led to a collapse in asset prices. Condo owners may even be incentivized to purchase condos knowing that these are safer than before under the new law. https://lnkd.in/e7eJsKXd Miami Association of Realtors

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Please read my latest article on the role C-PACE can play during the current disruption of the CRE market.

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While the late 1700s and early 1800s were characterized by the widespread industrial revolution, today we are witnessing another revolution: the widespread application of Artificial Intelligence, or AI. Undoubtedly, AI is transforming multifamily operations, such as enhancing the resident experience and boosting property management efficiency. And who better to talk about it than one of the best in the industry, RealPage's CIO, Lance French, an expert in integrating cutting-edge technology into the real estate sector. Please take a moment to listen to our most recent podcast. https://ow.ly/9NUs50SlkM5

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In case you are wondering how #C-PACE works, I wrote a piece for Thesis Driven to explain what C-PACE is and how it can be used in today's capital constrained environment.

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WASHINGTON, D.C. - Greater Washington’s economic outlook at standstill with ‘frozen’ commercial real estate The economic outlook for Greater Washington continues to show a region locked in stasis by a chilled commercial real estate market. At the same time, a handful of data points offer a glimpse of hope for the near future. That’s the latest finding from CBRE’s REVIVE Regional Vibrancy Index charting the D.C. area's economic strengths and weaknesses in the wake of a pandemic that changed the core of how the region operates, from the shift to hybrid work to the evolution in how people get around. CBRE and the Washington Business Journal are partnering to produce the monthly index, tracking changes throughout 2024. The index in May fell 1.3% from the previous month to 65.5 out of 100. The data lags by about a month. The most recent index, however, sits 12.2% below where it was a year ago in May 2023. Like in April, the score continues to be weighed down by a growing intensity of distress in the region’s commercial real estate markets, which face higher interest rates and softer demand. Valuations of commercial space, especially downtown offices, have also fallen dramatically, leading to fewer transactions. Office foreclosures in the first half of 2024 have already exceeded the total number recorded in 2023, CBRE reported, fueled primarily by rising vacancy and upcoming debt maturities. “Right now the region’s commercial real estate sphere just remains generally frozen and challenged,” said ​​Ian Anderson, CBRE’s senior director of research and analysis. The commercial real estate component of the score is at the lowest number the firm has ever recorded, and it is likely to remain stagnant. A lack of commercial real estate transactions is also constraining the budgets of local governments, including suburban jurisdictions, by depriving them of tax revenue. That could hold up some initiatives that governments may have otherwise pursued had the tax dollars been available, Anderson said. “That’s a hard thing for people to get a handle on, but it’s going to be something we’re just going to have to deal with over the next couple of years,” he said. The good news? The real estate industry has likely absorbed what Anderson believes to be the brunt of higher interest rates and their effects on values, especially in retail, industrial and multifamily. In the fall, he said, there’s potential for investors to move back toward new commercial real estate investments as they settle deeper into this new normal. But the caveat is that some forthcoming sales activity will not necessarily reflect positive data points. Transactions, for example, could come from multifamily owners unable to sustain higher interest rates. For more, click on the link below. #escrowcredirt #newmarktitleservices https://lnkd.in/eaztc54N

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While rent controls may seem appealing on the surface, history has shown that they often fail to address the root causes of housing challenges. Instead, a focus on policies that promote housing development and address supply-demand imbalances could prove to be more beneficial for creating a more equitable and sustainable housing market in the future. #RentControl #HousingSupply #AffordableHousing

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There is a pivot underway in the US built environment, with 20 states passing laws to improve housing supply. These changes, while insufficient to unlock a wave of new supply, will be seen as critical foundations for new housing. The number of homes we need is far greater than what most imagine. 30m homes or more are in disaster zones, 50 million homes are fully depreciated and many of these are out of step with aging and ADA needs. the majority of houses are not in actual “places” but in sprawl and thus we need a wave of place making. This will be a multi-trillion investment opportunity for those willing to reconsider their priors

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OPPORTUNITIES IN COMMERCIAL OFFICE SPACE Bank of America (BAC), the second-largest U.S. bank measured by assets, said it increased the amount of bad loans it charged off during the first quarter by 4X to $350 million compared to the previous quarter. PNC Financial Services Group is facing a similar issue with nonperforming loans (NPLs) in their commercial real estate segment rose 26% to $923 million in the first quarter compared to the prior quarter. Banks classify loans as nonperforming when borrowers are at least 90 days late on payments but still hold them on their books. Executives at some of the country's other large banks — JPMorgan Chase and Wells Fargo — are saying they don't expect a turnaround in the office market anytime soon. As office properties’ values are lowered, borrowers are renegotiating loans or walking away from buildings. This provides a window of opportunity for owner operators, investor and developers that reposition properties for varied usage. Approximately $17.4 billion of Bank of America’s commercial real estate loan book is tied to office buildings, making it the largest category. While, office makes up about 22% of PNC’s total commercial real estate loan book. With these stresses and defaults, there is an underlying advantage to new entries in the space that can acquire significantly below market and even further below replacement costs. The new entrants are looking into repositioning the properties, more creative or flex space opportunities or an acquire/hold approach as they have the capacity to weather the current storm. MARQUIS Commercial Properties sees significant opportunity in key MSAs and other coastal metro areas that are classified (CBSA) if acquired at the stressed discount levels and properly managed and stabilized. Sound interesting? Let's discuss. DM us for more details #banking #finance #realestate #commercialrealestate #office #investing #innovation #marquiscommercialproperties

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Freddie Mac's latest midyear outlook forecasts muted growth for the multifamily sector in 2024, with high supply and slow rent growth posing challenges. Despite a healthy economy, the vacancy rate is set to rise, and rent growth is expected to be just 2.7%. This tempered performance is a result of record-high new unit supply and economic volatility. However, long-term prospects remain strong due to housing shortages, high for-sale housing costs, and favorable demographics. Secondary and tertiary markets, particularly in the Sun Belt and southern plains, are likely to see more robust growth. https://lnkd.in/dUYcUevi Website: https://londonmoeder.com/ Facebook: https://lnkd.in/d7-qmPKb LinkedIn: https://lnkd.in/dsKSa7am TikTok: https://lnkd.in/dMJuxejJ Youtube: https://lnkd.in/d2rGGnCy #commercialrealestate #commercialproperty #CommercialLand #commerciallandforsale #warehousespace #officespace #flexspace #industrialspace #sandiegocommercialrealestate #sandiegorealestate #realestate #cre #realtor #realestateagent #realestateinvesting #property #commercial #commercialproperty #realestateinvestor #business #investment #propertymanagement #investmentproperty #residentialrealestate #forsale #retail #entrepreneur #construction #officespace #realestatebrokerage #housingshortage #housing #housingelements #housingmarket #housingcrisis #orangecountyrealestate #orangecounty #orangecountyhomes #latimes #lahousing #losangeleshousing #housingresearch

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#EXCLUSIVE: In some swing states, which are critical to President Joe Biden’s reelection bid, #rental costs have more than doubled in the past four years. In fact, 6 out of the top 10 markets and 1/3 of the top 100 markets with the largest increases happen to be in swing states, according to a USA TODAY analysis of data obtained exclusively from Rent.com. John Pike’s biggest fear is ending up on the street. For years, the retired 79-year-old Madison, Wisconsin, resident has barely made ends meet, with no discretionary income to speak of. Most of his Social Security check of $1,578 goes toward rent. At $1,220, that's more than 77% of his monthly income. Between the rising cost of food prices since the pandemic and his prescription medication, there’s hardly anything left. When his lease expires in September, the rent on his apartment, where he’s lived for the past 24 years, will go up to $1,600. That's an amount he cannot afford. “My big worry is that I may be homeless again,” said Pike, who has held a series of jobs including as a translator and programmer. Inflation and the economy have long worried American voters, polling shows. But as housing costs continue to be the biggest driver of core inflation, renters are feeling increasingly disillusioned with politicians. https://lnkd.in/eyaPpTE5

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📊 𝐘𝐎𝐘 𝐂𝐡𝐚𝐧𝐠𝐞 𝐢𝐧 𝐇𝐨𝐮𝐬𝐢𝐧𝐠 𝐈𝐧𝐯𝐞𝐧𝐭𝐨𝐫𝐲 𝐟𝐨𝐫 𝐌𝐚𝐲 𝟐𝟎𝟐𝟒 📊 Lance Lambert, Co-Founder of ResiClub, recently shared a graphic depicting the May 2024 year-over-year change in housing inventory. This data sheds light on significant trends across the U.S. housing market. 𝑆𝑢𝑚𝑚𝑎𝑟𝑦 𝑜𝑓 𝐾𝑒𝑦 𝑃𝑜𝑖𝑛𝑡𝑠 𝑓𝑟𝑜𝑚 KB Home's 𝐶𝑂𝑂, Rob McGibney: • 𝐑𝐢𝐬𝐢𝐧𝐠 𝐈𝐧𝐯𝐞𝐧𝐭𝐨𝐫𝐲: In regions like Florida, resale inventory levels have doubled year-over-year, increasing from 1.8 months to 3.6 months of supply. While this is a notable rise, it remains below the historical norm of six months of supply. • 𝐂𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐢𝐯𝐞 𝐌𝐚𝐫𝐤𝐞𝐭: Resale homes are the primary competitors for new home builders like KB Home. Despite the increase in inventory, the demand for new homes has not seen a drastic change yet. • 𝐑𝐞𝐠𝐢𝐨𝐧𝐚𝐥 𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞: All regions have performed well, with each community maintaining sales above five units per month. The impact of rising resale inventory on sales is something to watch, but it has not significantly affected performance so far. • 𝐍𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐓𝐫𝐞𝐧𝐝𝐬: The graphic illustrates varying trends in inventory changes across different regions. Some areas are experiencing significant increases in inventory, while others remain stable or even decrease. • 𝐑𝐞𝐠𝐢𝐨𝐧𝐚𝐥 𝐕𝐚𝐫𝐢𝐚𝐭𝐢𝐨𝐧𝐬: For example, Florida has seen a substantial increase in inventory, impacting the market dynamics and creating more competition for new home sales. • 𝐌𝐚𝐫𝐤𝐞𝐭 𝐁𝐚𝐥𝐚𝐧𝐜𝐞: The graphic highlights how some markets are approaching a more balanced state, while others still have a long way to go to reach historical norms. At Five Freedoms Firm, we are closely monitoring these trends to provide you with the best investment advice. If you’re interested in understanding how these changes impact your investment strategy, feel free to reach out. We offer personalized discussions to help you navigate the current housing market landscape. Stay ahead of market trends and make informed investment decisions with us at Five Freedoms Firm. 🌟 𝐎𝐮𝐫 𝐋𝐚𝐭𝐞𝐬𝐭 𝐖𝐞𝐛𝐢𝐧𝐚𝐫 𝐑𝐞𝐜𝐨𝐫𝐝𝐞𝐝! Did you miss our latest webinar? No worries! Request a copy of the recording or schedule a 1-1 call with us to discuss your investment opportunities. Limited spots are available, so act now to secure your place! Aaron Duthie Swift Home Solutions

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The Mortgage Bankers Association recently published their Quarterly Commercial/Multifamily Mortgage Bankers Originations Index (https://lnkd.in/g5gH-JCu). While origination volumes remain below historical averages in 2Q24, it shows a rebound compared to the prior quarter. CMBS stands at its highest level since 1Q22 and Life Co rose to levels seen in a year ago.

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Interested in seeing the availability report of Los Angeles offices spaces? Check out the graph below. The trend depicted on the graph may not surprise many. You can see the huge uptick in availability over the last few years since 2020. To put things into perspective, this can be compared to driving down your residential street and ¼ homes are for sale. Imagine the buying power, optionality, and leverage you would have? Well…that’s the world we’re living regarding the commercial real estate landscape - it’s a great time to be looking for new office space or renegotiating on your current lease. The power lies in the hands of the tenant! 

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Explore Moody's data on the multifamily sector's changing dynamics in feature by Multi-Housing News. Discover insights on vacancy rates, rent performance, and market trends amid ongoing supply-side pressures and elevated concessions in tenant-favored markets: https://lnkd.in/eh_t2aPJ

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