The limited supply of urban industrial inventory available for “last mile” e-commerce distribution space is causing investors and end-users to get creative by repositioning other types of real estate with failed uses or shrinking demand, according to a JLL report, Urban infill: the route to delivery solutions.”  The report notes that annual total e-commerce deliveries have more than tripled over the past five years, but development of new urban industrial infill assets has remained relatively flat.

Despite dwindling opportunities in urban locations, investors remain interested in the 18 percent sales price premium last mile industrial assets command over “first mile” locations, and the higher rents users are willing to pay in order to be near their customer base.

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The Appraisal Institute and the Land Trust Alliance co-signed a letter Nov. 29 urging congressional leaders to advance the Charitable Conservation Easement Program Integrity Act, which would help maintain the integrity of conservation easement donations by closing an apparent loophole related to abusive syndicated tax shelters. 

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The Appraisal Institute designated 42 members in November, including 18 who received MAI designations, six who received SRA designations, 16 who received AI-GRS designations and two who received AI-RRS designations.

View the list here.

Ohio Gov. John Kasich on Nov. 8 appointed William Fall, MAI, SRA, to the state's Real Estate Appraiser Board for a term ending June 30, 2021. Fall is CEO of the William Fall Group, a nationwide valuation firm based in Toledo.

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As you're aware by now, AI joined 17 other groups to submit public comments opposing NCUA's proposal to quadruple – from $250,000 to $1 million – the appraisal threshold for non-residential real estate loans. Our own state chapter (NCAI) has submitted public comments as well. Click the button below to read them.

Read NCAI's Letter

A modest increase in interest rates and home prices kept housing affordability at a 10-year low in the third quarter of 2018, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) released today.

In all, 56.4 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $71,900. This is down from the 57.1 percent of homes sold in the second quarter that were affordable to median-income earners and the lowest reading since mid-2008.

By John Egan

Some commercial real estate observers might be a little worked up about how office REITs might be affected by WeWork and its co-working brethren. Yet is that consternation really warranted?

By Erika Morphy

With a Republican-controlled Senate and a Democrat-controlled House of Representatives, no significant commercial real estate-related legislation is expected to pass, according to a GlobeSt.com analysis reported Nov. 7. Among the issues expected to stall: additional deregulation, further loosening of Dodd-Frank and more tax changes. 

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The Appraisal Institute designated 72 members in October, including; 1 who received MAI AND AI-GRS designations; and 34 who received MAI designations; 11 who received SRA designations; 17 who received AI-GRS designations; 9 who received AI-RRS designations.

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By Kelsey Ramirez

The homeownership rate increased slightly in the third quarter, driven primarily by a jump in first-time homebuyers.

By Michael Tucker

Industrial activity ‘surged' in the third quarter, led by demand from the third-party logistics and packaging industry, reported Colliers International, Toronto.

By Michael Tucker

Technology companies from northern California, Seattle, Boston and New York are expanding into new markets, creating more office space demand and rent growth in beneficiary markets, reported CBRE, Los Angeles.

The Federal Reserve issued its highly anticipated proposed framework for applying enhanced prudential standards to banking firms with $100 billion or more in assets, as required by S. 2155, the regulatory reform law.

The Fed proposed to establish four categories of standards that seek to reflect the risks of firms in the group. The agency outlined the risk-based indicators it would use to determine the applicability of standards, including size, cross-jurisdictional activity, weighted short-term wholesale funding, nonbank assets and off-balance sheet exposure. In addition, the Fed released a second joint proposal with the OCC and FDIC that would tailor requirements under the regulatory capital rule, the Liquidity Coverage Ratio and the proposed Net Stable Funding Ratio rule for banks in each group. The proposal does not apply to foreign banking organizations or intermediate holding companies of foreign banking organizations, but the Fed signaled it will issue a separate proposal in the weeks ahead on how it will supervise these institutions.

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that rates increased slightly across the board.

Sam Khater, Freddie Mac’s chief economist, says, “Despite volatility in the stock market, the 30-year fixed-rate mortgage inched forward just 1 basis point to 4.86 percent this week. We expect rates to continue to rise, which will put downward pressure on homebuying activity. While higher borrowing costs will keep some people out of the market, buyers with more flexibility could take advantage of the decreased competition.”

News Facts

• 30-year fixed-rate mortgage (FRM) averaged 4.86 percent with an average 0.5 point for the week ending October 25, 2018, up from last week when it averaged 4.85 percent. A year ago at this time, the 30-year FRM averaged 3.94 percent. 
• 15-year FRM this week averaged 4.29 percent with an average 0.4 point, up from last week when it averaged 4.26 percent. A year ago at this time, the 15-year FRM averaged 3.25 percent. 
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.14 percent with an average 0.3 point, up from last week when it averaged 4.10 percent. A year ago at this time, the 5-year ARM averaged 3.21 percent.

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By Michael Gerrity

According to new research by global property consultant CBRE, more commercial real estate investment capital crossed U.S. borders in both directions during H1 2018, with foreign inflow up by 29% from the first half of 2017, and U.S. outflow up by 15% in H1 of 2018.

On net, the U.S. commercial real estate market had a capital surplus of roughly $12 billion. Savvy foreign investors have several strategies to mitigate foreign exchange risk when acquiring U.S. assets, one of which is purchasing forward contracts to hedge against U.S. dollar depreciation. 

French company Unibail-Rodamco's acquisition of Westfield, which included a $7.7 billion shopping mall portfolio, elevated inbound capital flows from REITs and France, as well as foreign retail acquisitions, to record highs.

CBRE further reports the cost of hedging against U.S. dollar depreciation is rising worldwide, reducing effective yields for many foreign investors, despite the continuing attractiveness of the U.S. market in growth and liquidity terms. Inbound capital flows have eased in the past 24 months, providing more opportunities for domestic investors.

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Strong market conditions helped fuel a 6 percent increase in multifamily lending in 2017 as lenders provided a record high $285 billion in new mortgages for apartment buildings with five or more units, the Mortgage Bankers Association reported today.

"The multifamily lending market in 2017 benefited from improving fundamentals, rising property values and low interest rates," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "The result was larger loan sizes and record levels of overall borrowing and lending."

By Liam Quinn

Missouri Gov. Mike Parson on Oct. 18 appointed Randy Bryson, SRA, AI-RRS, to the state's Real Estate Appraisers Commission. Bryson is president of Associated Property Analysts in Columbia and has been an appraiser since 1980. 

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By Jessica Guerin

It’s been just a few weeks since the Federal Housing Administration announced that it will now require a second appraisal on select reverse mortgage loans, but lenders are already feeling the effects.