The 10 Best and Worst U.S. Cities to Retire in 2017

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Some clients may turn to you for guidance on the best places to retire in the U.S., but it may not be the sunny golfing spots that typically come to mind. In fact, many of the top cities to retire are in the cold Northeast, including Pittsburgh, Boston and Providence, R.I., according to BankRate.com’s latest ranking.

The website reviewed 50 metro areas according to several factors that would be appealing to retirees, such as local weather, cost of living, crime rate, health care quality and affordability, taxes, cultural vitality and public transportation. The ranking even takes into consideration the percentage of the local population ages 65 or older.

“Oftentimes people focus their retirement search on warm weather locations, but there are many important factors to weigh when it comes to where to live in your later years,” Bankrate.com analyst Taylor Tepper said in a statement. “Sun and sand are great, but finding high-quality medical care and an affordable cost of living are important, too.”

Read the original article here.

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Ten-X Says CRE Property Prices Decline for Seventh Straight Month

The commercial real estate sector remained in the doldrums in November, with nationwide commercial pricing edging down by 0.1% — the seventh consecutive month of contraction for the index, according to the latest research from Ten-X. November pricing data suggests that investors are increasingly cautious about both CRE fundamentals and property values one year after a presidential election that introduced major uncertainty to U.S. policy and prompted an increase in interest rates.

The pricing gauge is now a meager 1.5% higher than its year-ago level, the weakest pace of growth in this cycle.

Ten-X Chief Economist Peter Muoio says, “The U.S. presidential election is a year behind us, but the events of intervening months have done nothing to alleviate investors’ wariness. Instead, the Ten-X CRE Nowcast’s annual growth rate continues to reach new lows. Pessimism about fundamentals, a policy environment in a constant state of flux, and impending interest rate hikes are all adversely affecting commercial real estate, and the market’s outlook at this stage is wary.”

Read the original article here.

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Real Estate power players split on cityʼs chances to win Amazon HQ

Stephen Ross would, perhaps, have the most to gain if Amazon chose New York for its next headquarters.

After the e-commerce juggernaut issued a request for proposals from interested municipalities, the city floated four potential landing spots. The first location, with the biggest pool of potential employees and the most available office space, was Midtown West and Hudson Yards, the new live-work-play neighborhood being constructed by Ross’s Related Companies on the Far West Side, was the crown jewel.

Still, the billionaire developer isn’t holding his breath.

“I don’t think New York has a chance of winning,” Ross said during an all-star panel hosted by the NYU Schack Institute last week.

Convened during the institute’s annual Conference on Capital Markets, the so-called “Golden Apple” panel consisted of a justifiably proclaimed “Mount Rushmore of New York City Real Estate,” including Ross, Rudin Management chief executive Bill Rudin, Forest City Ratner president and CEO MaryAnne Gilmartin and RXR Realty chairman and CEO Scott Rechler.

More money, more problems

During the conversation, which began with tax policy and wrapped up with the growing specter of terrorism, Ross argued that New York had done enough to distinguish itself from other big cities hoping to attract Amazon, particularly the likes of Newark, which offered $8 billion in tax abatement.
New York left tax rebates out of its proposals, hoping to avoid an outright bidding exchange with other competitors, but state officials said it would be willing to negotiate privately.

“Amazon is leaving Seattle because they don’t want to be competing so much for the jobs that they’re looking for and the cost of doing business from that standpoint,” Ross said. “In New York, the cost of doing business is so great and they’re not offering that much. Other cities … it’s important for them and they’re offering incentives like you wouldn’t believe.”

The panel was split on the city’s prospects of landing Amazon.

Gilmartin agreed that the economics of the situation make a New York headquarters for Amazon “difficult to imagine.”

She acknowledged the potential for her company’s portfolio — which includes the MetroTech center in downtown Brooklyn as well as several properties in the Pacific Park area around the Barclays Center — Gilmartin said the arrival of a major employer such as Amazon would benefit the entire city.

“Rising tides raise all boats,” she said. “It doesn’t matter much to me whether they end up at Pacific Park, whether they end up at the (Brooklyn Navy Yard) or whether they end up in Midtown because it’s good for New York.”

Big Apple, bigger opportunities

Rudin, on the other hand, said he was confident in New York’s ability to win over Amazon, comparing the collective efforts of business, government and educational institutions in the city’s bid to the efforts that went into the successful campaign for Super Bowl XLVIII and the less successful 2012 Olympics bid.

“There is obviously a cost factor, but when you weigh that against the talent pool, the educational institutions that are involved in this … there’s an infrastructure already in place here to provide the workforce for Amazon and all the other companies that want to come here,” he said. “And that’s our strength, that’s going to overcome some of our cost differentiations.”

Rechler, who has worked with Gov. Andrew Cuomo, previously as a commissioner of the Port Authority and now as a board member of the Metropolitan Transit Authority, said the state is ready to roll up its sleeves in the Amazon fight.

“The state’s been clear, it’s not going to put out offers for unknown choices,” he said. “If Amazon comes back and says ‘I want one or two of these sites in New York,’ trust me, the state is going to put a very, very robust package out.”

Rechler said the Amazon race embodies a greater challenge for the city: appealing to the best minds the world has to offer. “It’s a war for talent,” he said.

Like Rudin, Rechler said the city’s biggest selling point is its workforce. He also acknowledged that many of today’s market trends — the flood of premium rental housing; reimagined office layouts; retail innovations and new amenity offerings — cater to the wants of the world’s top university graduates.

Feeling SALTy about tax reform

More than the cost of doing business, the panelists counted the cost of living among the greatest hurdles to attracting major employers. Exacerbating that concern is the proposed elimination of the State and Local Tax, or SALT, deduction from the federal tax code, a move called for by Republicans in the U.S. House of Representatives.

“It has serious implications for this city and for young, urban professionals who want to live here and raise families here, so I am very concerned,” Gilmartin said. “I think this has the ability to really have a pretty seismic impact on the near-term prosperity of New York.”

The issue was such a concern that Gov. Cuomo, who was scheduled to give a keynote address at the event, had to cancel at the last minute to instead attempt to dissuade New York representatives from supporting the bill. Despite his efforts, the House passed the $1.5 trillion tax cut that afternoon.

Rudin said the tax reform package, as it stands, would both help and hurt real estate in New York if it became law. While caps on tax rebates would hurt homeowners throughout the Metropolitan region, lower tax rates on real estate investors and holders will benefit the industry.

“[The tax bill] is a very serious issue for us as well as other high-tax states, but as we’ve talked about before over the last 20 years, we’ll figure out a way to deal with that,” he said. “The state and the city will have to be more efficient and lower taxes and perhaps do things in a more efficient way to attract and retain people to come to our city.”

Ross said he doesn’t believe the elimination of the SALT deduction does not pose as much of a threat to New York as it did the last time it was discussed in 1986 when Connecticut had no state income tax and New Jersey had only a modest one. With a more level playing field in the region, Ross said the state has less at stake.

“Everybody says, ‘well, I wanna move to Florida,’ but if you think about it, the jobs aren’t there and I don’t think there are enough industries that can move to Florida,” he said. “So, I think that while it will have an impact, I don’t think it’ll be quite as great as we thought it might be in ’86.

“I’m not so sure this tax bill is going to get passed,” Ross added, contributing to the panel’s broadly held skepticism of the Republican-controlled Congress and White House.

Bridge and tunnel crowding

However, as the GOP tax plan picks up steam, Rechler said the biggest threat it poses to Greater New York is the elimination of money that was promised to pay for crucial infrastructural improvements, with those funds being redirected to offset the deep cuts to personal income and corporate taxes.

“One of the most critical things we need to do is reinvest in our 20th-century infrastructure so we can stay competitive for the 21st century,” he said. “A lot of that, we’re able to do without the federal government ,but the major projects, like the tunnel under the Hudson River, cannot be done without the federal government. So while this tax bill is happening, it might ultimately be putting a tax on our children to take care of that in the future.”

When asked what other issues keep them up at night, both Gilmartin and Rechler spoke about mass shootings and other acts of terror that seem to be ever more prevalent in the U.S. and around the world.

“It has nothing to do with real estate, nothing to do with business, it has to do with being a resident of a sanctuary city, being a woman and being a mother,” Gilmartin said of her biggest fear. “Thinking about the political environment and the need for us to remember the rule of law and things that are so basic and so fundamental that have come under challenge if not threat in the recent year.

“It’s disturbing, hopefully not destabilizing, but it does keep me up at night,” she said.

Ross said his concerns center on paradigm-shifting technology, such as autonomous cars, and how prepared his and other companies are to embrace it.

“Change is accelerating at a pace that we’ve never seen before and impacts are so much greater,” he said. “As you look out and see the impact of artificial intelligence and technology and where that’s leading us and we talk about changes and we need certain things repaired, like the subways. What’s that going to be in the long term?

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Texas Economic Indicators

The Texas economy strengthened in October. The state posted strong job gains, and the unemployment rate fell to a record low. Firms responding to the Dallas Fed’s Texas Business Outlook Surveys reported accelerating growth in production, revenue and sales as well as continued optimism in the outlooks.

Labor Market

Texas employment expanded an annualized 6.4 percent in October, outpacing the nation’s 2.2 percent growth (Chart 1). Year to date, Texas employment has grown at a 2.7 percent annual rate. The Dallas Fed’s Texas Employment Forecast suggests 2.6 percent job growth in 2017 (December/December). The Texas unemployment rate dipped to 3.9 percent—its lowest point in the history of the series, which dates back to 1976. Unemployment also ticked down in all of Texas’ major metros and in the U.S. in October.

Payroll expansion was broad based across the major metros in October, with Houston employment surging 9.5 percent following a 7.2 percent decline in September. Employment has expanded in all Texas major metros year to date, with San Antonio leading at 3.0 percent.

Service sector employment has grown 2.4 percent this year through October, and goods sector employment is up 4.3 percent. Employment has expanded in all major sectors this year except information services, where it has declined 2.4 percent. Payrolls in oil and gas have increased the most at an annualized 13.1 percent year to date.

Texas Business-Cycle Index

The Dallas Fed’s Texas Business-Cycle Index reflects continued expansion in the state’s economy (Chart 2). The index rose an annualized 5.8 percent in October, well above its long-run average of 3.9 percent. Growth in the index has accelerated each month since mid-2016.

Texas Business Outlook Survey Indexes

The three-month moving averages of the Dallas Fed’s Texas Business Outlook Surveys indicated accelerating growth in factory production, service sector revenue and retail sales in October. The three-month moving average of the manufacturing production index rose to its highest level in over 10 years, and the moving averages for the headline indexes in all three surveys were above their long-term trends.

Outlooks continued to reflect optimism across sectors (Chart 3). The three-month moving average of the company outlook index for manufacturing reached a postrecession high in September and held steady in October, while the three-month moving average of the service sector and retail company outlook indexes ticked up in October and remained elevated compared with their long-run averages.

Energy Sector

West Texas Intermediate crude oil dropped the week of Nov. 17 to $55.89 per barrel but remained 8.0 percent above levels seen four weeks earlier (Chart 4). Natural gas was $3.08 per million Btu, 8.9 percent above levels four weeks earlier. The weekly rig count is at 449 after reaching a post-oil-bust peak in August of 466 rigs.

Exports

Texas exports rose 4.2 percent in September, while U.S. exports edged down 0.3 percent. Year to date, Texas exports are 8.3 percent higher and U.S. exports are up 3.6 percent compared with the same period in 2016.

Even so, Texas exports declined 1.9 percent in the third quarter (Chart 5). Exports to Mexico—Texas’ largest trading partner—ticked up 0.9 percent, and exports to China rose 14.2 percent. Exports to other world regions dropped during the quarter.

Exports of computers and electronics—Texas’ largest export sector—fell 10.8 percent in the third quarter. Exports of petroleum and coal—the state’s second-largest export sector—declined 2.8 percent.

Housing Market

The Texas real median home price was $225,085 in September—3.9 percent above year-ago levels and 0.3 percent above August levels (Chart 6). Home prices in Austin and Houston ticked up in the month, while they edged down in Dallas, Fort Worth and San Antonio. Fort Worth’s median home price in September posted the fastest year-over-year increase among the major metros at 7.4 percent, followed by Dallas at 5.5 percent.

Texas existing-home sales rose 9.5 percent in September, and the five-month moving average held steady. Home sales in Texas are 4.1 percent higher in the first nine months of the year compared with the same period in 2016. Year-to-date sales are ahead of the same period last year in all the major Texas metros, with Houston posting the slowest growth at 2.6 percent.

Read the original article here.

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3Q17 ARA NEWMARK UNITED STATES MULTIHOUSING MARKET OVERVIEW

ARA Newmark and Berkeley Point Capital present the Third Quarter 2017 United States Multihousing Market Overview. The statistics and outlook contained in the report illustrate current trends in the Multihousing sector.

Executive Overview

Sales Volume Sales volume for the past 12 months totaled $148.5 billion with quarterly volume reaching $39.3 billion, representing an 11.1% quarter-over-quarter increase and 4.0% year-over-year growth. Investors continue to pour capital into top-tier secondary markets such as Atlanta, Dallas and Denver.
Cap Rates Cap rates remain flat year-over-year at 5.0% for institutional-quality assets. The third quarter represents the tightest spread between major markets and secondary markets as yield-driven capital continues to flow into secondary and tertiary markets.
Rent Growth Nationwide rent growth remains flat at 2.3% while still positive. Western metros such as Phoenix, Sacramento, San Diego and Seattle continue to lead the nation in rent growth as they benefit from strong demographic and economic tailwinds.
Supply and Demand New supply is anticipated to peak in 2017 with over 389,000 units delivered throughout the United States. This cycle has been heavily weighted toward urban infill and luxury product compared with the previous cycle which was dominated by Class B suburban assets.
International Capital International capital sales volume rose to $11.3 billion over the past 12 months. High net worth and sovereign wealth funds are increasingly growing their multihousing portfolios through indirect investment vehicles and joint ventures with domestic sponsors.
Debt Markets Debt outstanding increased $21.7 billion to $1.2 trillion with Agency & GSE lending accelerating 2.5% quarter-over-quarter compared to the broader market of 1.8%. Debt capital remains plentiful for well-positioned assets despite a slowdown in the CMBS market.

For the full report, please click here.

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Forget Machu Picchu: Seven Newly Accessible Wonders of the World

Maybe with your passive income in the bank, you’ll be tempted to visit one if these…

If visiting the world’s most ancient temples and monuments—Angkor Wat, Machu Picchu, Chichen Itza, Petra—inspires your inner Indiana Jones, just imagine what it would be like to explore world wonders few people have ever even heard of yet.

Some of the world’s most staggering historical sites—places that have long existed as local secrets—have recently been made accessible thanks to a slew of intrepid tour operators, hoteliers, or infrastructure developments. In the coming years, these places will find their way onto hordes of global travelers’ bucket lists, but for now they are still relatively under the radar.

There are the dramatic, thousand-year-old temple complexes in India that are immaculately preserved but were hard to visit in style—until the area’s first luxury hotel opened. There is a jungle-shrouded archaeological site in Colombia that predates Machu Picchu by 650 years, and a spectacular sacred city in Sri Lanka that’s until now been off limits because of underdeveloped infrastructure and political turmoil. And that’s only a drop in the bucket.

“A willingness to move a little off the beaten path often provides great rewards,” said Lisa Ackerman, executive vice president of World Monuments Fund, who says that the joy of discovery and lack of crowds makes these underexplored sites especially exciting for visitors.

But the benefits of visiting these places go far beyond that. Spreading visitation among more sites, she says, is an important key to tourism management everywhere—as proven by the fact that overvisitation to Machu Picchu continually threatens to shut the site down for tourists for good. (It’s not just Peru, either; the overtourism phenomenon is playing out across the globe.) And by creating a viable tourism economy around newly discovered sites, travelers motivate locals to take pride in their heritage and invest in its preservation.

With that in mind, we’ve assembled a list of the newly accessible wonders of the world, along with the practical information you need to get there first.

The Remains of a Royal Empire in India

A stepped pond in the Vijayanagara temple complex in Hampi, India.Photographer: IndiaPictures/Universal Images Group Editorial

It wasn’t long ago that visiting the 14th-century ruins of the Vijayanagar Empire in Hampi, India, meant taking an overnight train from Bangalore and sleeping in a three-star inn. (The lost city is situated in central Karnataka, placing it almost midway between that southern Indian tech hub and the beach town of Goa.) But in the past two years, a handful of independently owned, small-scale resorts have opened, crowned by the recent arrival of Kamlapura Palace. The five-star hotel is the area’s first, with 46 rooms that offer a modern-day reimagining of the area’s historic remains; local expert Victoria Dyer, of India Beat, calls it a game-changer for her high-end travelers. Getting there is easier, too, with plenty of infrastructure investment going for road improvements throughout the state.

As for the monuments themselves, expect 265 square kilometers of terrain to explore, speckled with mysterious-looking boulders. The Hindu temple of Virupaksha, dedicated to Shiva, is said to be one of the oldest structures in the empire (and possible in the country), dating to the 7th century, while exquisitely preserved sites such as the Sule Bazaar, the Queen’s Bath, and the elephant stables offer a remarkable glimpse into old Indian life.

The Onetime Mayan Capital in Guatemala

Ashish Sanghrajka, president of Big Five Tours & Expeditions, says that El Mirador is five times the size of Tikal, the ruins that bring hundreds of thousands of visitors to Guatemala each year. But given that they’re still being unearthed by a team of archaeologists, it’s hard to know exactly how large and how important they really are. For now, the answer to both is “very”—the head scientist on site has said that unearthing it has been like “finding Pompeii.” After all, this is believed to be a onetime capital of the Mayas, and it is one of the backdrops for Morgan Freeman’s TV series, The Story of God.

So why has nobody else caught on? For one thing, getting there has typically required a dangerous, five-day trek—but Sanghrajka is sidestepping that by taking his first travelers to the region by helicopter. The chopper lands in a tiny village nearby, where guests can engage with locals who have rarely encountered foreigners; then they saddle up atop donkeys for a three-hour trip through a still-active dig site. (Sanghrajka says the archaeologists are even open to some hands-on help, since visitation is so rare.) “It’ll probably be another 10 years before they have the place fully cleaned up,” he said. “But seeing a place like this totally untouched is something incredible.”

Sprawling Roman Mansions in Portugal

The house of Fountains in Conimbriga, two hours north of Lisbon.Photographer: Jose Elias / Lusoimages/Moment RM

They were created in the 2nd century BCE, renovated under the reign of Emperor Augustus, and then buried under hundreds of years of debris—but now, 100 years after their rediscovery, the Roman ruins of Conímbriga are ready for the 21st century spotlight. With tourism to Portugal hitting an all-time high, overlooked sites such as Conímbriga are gaining awareness—along with nicer places to stay nearby. Virginia Irurita, founder and co-owner of Made for Spain & Portugal, books her guests into Hotel Quinta das Lágrimas, a recently renovated member of Small Luxury Hotels of the World in the neighboring town of Coimbra. “Not only is it a beautiful city,” she said, “it’s also the homeland of fado singing [a melancholic, local style of music], which is a must-see in Portugal.” She’ll also arrange personal guides to bring the lavish Roman mansions back to life again—showing off everything from thermal baths to colorful mosaic décor and gardens with hundreds of historic, hydraulic-powered water jets. (Yes, really.)

Pyramids on Steroids in Sudan

The pyramids of Meroe, in Sudan.Photographer: Albee Yeend

Sudan has twice as many pyramids as Egypt—and yet many people couldn’t point to the vast nation on a world map. (It’s just a short ride down the Nile from Luxor and Aswan.) Tourism infrastructure here is still in its infancy because of a prolonged civil conflict that led South Sudan to split off in 2011, but it’s become an object of fascination practically overnight for luxury outfits such as the Explorations Company. Owner and director Nicola Shepherd is now coordinating privately guided, six-day trips that include visits to the pyramids of Meroe along with the temple ruins at Soleb, an Egyptian monument to the god Amon that’s decked out in hieroglyphics. Overnights are at high-end tented camps and polished local guesthouses. A bonus, Shepherd says, is an easy airlift to Nairobi for combo trips that tack on a beautiful Kenyan safari. But the real draw is having world-class desert ruins all to yourself, with barely even a security guard in sight.

An Ancient Capital in Morocco

The ruins of Volubilis in Morocco. Photographer: Mark Borton

Volubilis, the capital of the Mauritanian empire, couldn’t have been built in a prettier place—in the Moroccan mountains near Meknes. Yet it’s on hardly any itineraries. Now that’s starting to change, as such operators as Intrepid Travel are adding it to more tried-and-true stops such as Marrakesh and Chefchaouen. Even in a country that’s steadfastly held onto tradition, Volubilis feels like a true time machine. Its impressively ornamented ruins, which date to the 3rd century BCE, bore 10 centuries of occupation, with Romans, Christians, Muslims, and Berbers all leaving their mark.

The Lost City of Colombia

An overhead view of Ciudad Perdida, high in the Sierra Nevada of Colombia. Photographer: Thierry Monasse/Corbis

This 1,000-year-old ruin in the Colombian Sierra Nevada is 650 years older than Machu Picchu and has perhaps even more mysterious appeal. Built by the Tayrona people atop a mountain pass that’s dotted with palm trees, it was believed to have claimed as many as 10,000 residents in its heyday—but the surrounding jungle swallowed it up until the early 1970s, after a group of bird hunters turned tomb-raiders dug into the earth and found heaps of golden artifacts. At least that’s how the locals tell the story. Adventurous hikers can traverse a five-day equivalent to the Inca Trail to arrive as the dramatic terraces of La Ciudad Perdida (literally, the Lost City). But now, luxury Colombia tour outfit Galavanta choppers guests in and out from their namesake lodge in the nearby mountains. They’ll also arrange cultural exchange experiences with the indigenous Kogui communities, which are said to have descended from the monuments’ creators.

A Lion-Shaped Fortress in Sri Lanka

The Famous Sigiriya Lion’s Rock fortress. Photographer: Sylvain Bouzat/Moment RF

When King Kassapa ruled over Ceylon in the late 400s, he decided to place his capital atop a 600-foot-high granite boulder smack in the center of modern-day Sri Lanka—a country that’s slowly been reborn to tourists after a prolonged civil war ended in 2009. The whole thing doubled as a massive piece of sculpture: Not only did workers carve stone staircases leading all the way to the top; they also added brick and plaster work to create the illusion of a gigantic lion emerging from the forest. The first two flights of stairs are straddled by enormous, clawed paws; another flight emerges from the lion’s mouth. At the summit, visitors can explore what’s left of Kassapa’s palace, gardens, fountains, and ponds—but the climb is half the fun. Then you can retreat to your own sumptuous digs, at the soon-to-open Pekoe House, in nearby Kandy.

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5 Trends in Multifamily Investing for 2018

As 2017 ends, it’s time to predict upcoming trends in the multifamily rental market. If you’re a multifamily investor, there will be a few surprises and some changes you should be prepared for. Here are five areas to follow.

BUILDING RENOVATIONS STAY THE COURSE

There’s a considerable amount of new construction in cities where there is demonstrated and structural job growth, including Portland, Seattle, Los Angeles and Denver. Traditionally, developers have been able to pencil in growth and get a good return for the risk of that development. New multifamily units being constructed in urban areas, urban cores or high-growth and high-job areas have caused a softening in the Class A market for the first time in years. In the new-built market, we’re finally seeing a plateau where supply is meeting demand. Do we need more Class B properties built in suburban locations to meet demand? Absolutely. Are they going to get built? Probably not. The risk/return for developers just doesn’t pencil. The upside to a softening market? Older existing Class B multifamily units built in the ‘70s, ‘80s and even ‘90s, which have been renovated will be in higher demand.

DON’T BYPASS THE SUBURBS

As the population is forced out of the urban core, the suburbs are becoming more attractive. This represents a golden opportunity for investors to look beyond the hot cities and search Class B properties in the outer ring of cities as well. If the suburbs want to grow and be vibrant, they need to create a sense of neighborhood that includes amenities. And that has, for many communities across the country, never been a part of their planning. People want a neighborhood. They want livability. They want walkability. They want an environment that draws people together. Purchasing a building is an investment into the community. Buying distressed buildings, under-performing buildings or under-managed buildings gives an investor the opportunity to enhance those neighborhoods.

DEMOGRAPHICS

The biggest multifamily rental pools will continue to be Millennials and Baby Boomers, and to some extent Generation X. The Baby Boomer market will keep growing as there are more than 70 million Baby Boomers across the country. As this group ages and sells their homes, they’ll want to downsize to amenity-rich multifamily properties. The Millennial rental population will also continue to grow. Like Baby Boomers, Millennials want less space but more community, including the ability to walk or bike to work and have close access to shopping and dining. Many properties in close-in suburbs will fill this need.

EVER-CHANGING INTEREST RATES

Cap Rates have stabilized at a low plateau, but will likely inch up as interest rates climb. This makes it challenging to purchase a property and reach a return hurdle. Yes, the debt will remain available, but with uncertainty surrounding interest rates, it makes underwriting more challenging. Agency lenders like Freddie Mac and Fannie Mae, both a huge part of recent multifamily market growth, have always been solid debt vehicles for multifamily investors and will continue on that path.

HOT MARKETS FOR 2018

Transactional volume is down year-over-year in most markets across the country. The issue isn’t finding a multifamily property, but finding one that makes financial sense. Plus, many investors are looking for the same thing. Case in point: Portland, Ore. Many investors want to buy in Portland but can’t find a deal that makes sense. Just a few years ago Portland was considered a secondary market. Now it’s a top-tier market. Why? There’s job growth, in-migration, vibrancy and public investment in infrastructure. Cities like Portland, Denver, Charlotte and Seattle all have that trait in common and ones that investors will continue to seek out.

PARTING ADVICE

We’ll see some pullback in the industry in 2018, compounded by a slowing of rent escalations in the market. That’s normal and nothing to be alarmed about. Buy right, underwrite correctly and hopefully you’ll make your money on the buy. If you get too exuberant in your underwriting, you’re going to have a difficult time getting your return on sale. Overall, it’s going to be another successful year.

Read the original article here.

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