Monday, June 7, 2021
Multifamily Is CRE’s Most Liquid Sector
By Lynn Pollack Globest.com
Multifamily transaction volume topped $138 billion last year and hit $32 billion in the first quarter of 2021, making the asset class the most liquid among all commercial real estate property types.
Closed-end fund closings targeting multi-housing assets have totaled $68.4 billion since 2016 and “will provide an ongoing source of liquidity,” especially as pricing discovery in the midst of COVID-19 resulted in more opportunities for private capital to invest in the space. That’s particularly true for high net worth individuals and institutional investors.
“Amid record levels of dry powder targeting the sector and increased clarity as to rent collections and the stability of the sector, institutional investors have been becoming increasingly competitive in securing transactions so far in 2021,” the report notes. “Investors continue to target secondary markets, primarily located in the Sun Belt, as these markets are home to business-friendly regulatory and tax advantages.”
Dallas-Fort Worth, Atlanta and Phoenix emerged as the top most liquid markets in the US, supplanting the historical mainstays of Los Angeles and New York. Capital momentum is also increasingly targeting garden-style and mid-rise assets in less dense locations.
And both lenders and borrowers have strong appetites for commercial and multifamily mortgages, making debt liquidity “abundant,” the report states. Q1 multifamily mortgage borrowing totaled $51.8 billion in Q1, with agency lenders capturing 62% of loan originations.
“First-quarter 2021 lending sources diversified as agency lenders started the year off slower following their robust originations last year,” the report states. “While banks, debt funds and insurance companies have more than filled the gap, agency lenders have taken a more competitive approach to winning business since April and we anticipate a strong second half of 2021.”
Supply continues to be a challenge for the sector, particularly among the renter-by-necessity and affordable housing segments, driving pricing. In addition, multifamily produces 4% to 6% dividend yields—better than both sovereign bonds and investment-grade corporate bonds, according to Yardi Matrix data.
Thursday, June 3, 2021
Black Creek Obtains $39.7 Million Loan To Build New Jersey Industrial Facility
By Linda Moss CoStar News
Black Creek Group has obtained $39.7 million in construction financing for a 508,000-square-foot industrial facility it's building in Florence, New Jersey.
Black Creek's Class A industrial building at 1100 W. Front St., called Florence West, will be located on 51 acres along the Delaware River. It is near the Pennsylvania and New Jersey turnpikes and offers regional access to the ports of Philadelphia and Newark-Elizabeth as well as multiple international airports, a deep labor pool and a third of the nation's population within one-day's drive.
When it's completed, the property will feature 36-foot-clear ceiling heights, 92 loading docks and two drive-ins, as well as ample trailer, with 101 stalls, and car, with 434 stalls, parking.
"Florence West's blue-chip sponsorship, state-of-the-art design and strategic regional location were extremely appealing to lenders, who continue to increase allocations for industrial," John Alascio, Cushman & Wakefield executive managing director, said in a statement. "This drove a competitive marketing process where BMO Harris ultimately provided highly attractive terms and a seamless execution for our client."
Black Creek is building its Florence project on a speculative basis without having any tenants lined up for it yet.
The developer also has another industrial project in Florence in the works. Roughly a year ago, Black Creek paid $14.75 million for a nearly 31-acre parcel at 837 Railroad Ave. It plans to build a 300,700-square-foot warehouse-distribution facility on the site.
Developer Secures $62 Million Loan To Develop Last-Mile Facility Preleased by TJX Companies
By Charlie Dettbarn CoStar Research
New York developer DH Property Holdings has secured a $62 million senior construction loan from PCCP LLC to develop a last-mile distribution facility 100% preleased to TJX Companies Inc. in northeast Philadelphia.
The 282,737-square-foot facility at 9801 Blue Grass Road will serve as TJX's second distribution center in the city. The off-price retailer's first is its 1 million-square-foot mission-critical facility located 1 1/2 miles north of the Blue Grass road center.
"A key driver of the industrial market today is e-commerce, and there is high user demand for same day service and last-mile connectivity," Aaron Malitzky, vice president with DH Property Holdings, said in a statement. "This facility's pre-lease with TJX is one of many examples of large logistics and last-mile companies occupying space across Pennsylvania to serve the local population inland distribution markets."
Construction on TJX's second distribution facility is set to begin this month and is slated to be completed by the third quarter of 2022.
Wednesday, June 2, 2021
Joint Venture Pays $19.5 Million for Wayne Industrial Building
By Ann Warren Harless CoStar Research
A joint venture between Mainstreet Capital Partners and Contrarian Capital Management LLC has purchased an industrial facility in Wayne, Pennsylvania, for $19.5 million.
The building is located on a 10-acre parcel just off the Swedesford Road corridor at 400 Devon Park Drive and totals 132,733 square feet. The joint venture acquired the building from Vimco Inc.
The joint venture plans to convert the building into a life science facility, which it has had success with in other markets such as North Carolina's Research Triangle region.
"This is our first acquisition into the Philadelphia market," Peter Tonon, partner at Mainstreet, said in a statement. "We think very highly of the area and hope to continue to do more transactions in the future."
