Retail Fundamentals on the Decline Due to Inflation, Banking Issues: JLL

Originally published on May 9, 2023, by Keisha Virtue for JLL.

Executive summary:

  • Retail fundamentals have started to pull back as a consequence of sustained inflation and banking troubles. Consumers have responded to persistent inflation by shifting money away from discretionary goods purchases in favor of groceries and other key necessities. Discounters and online retailers win consumers’ dollars, as real disposable income wanes.
  • Net absorption totaled a modest 9.1 million square feet for the quarter – a substantial decline from the 20.1 million square feet absorbed in the fourth quarter.
  • Demand is still coming largely from discounters like Burlington and dollar stores, as well as QSRs and fast casual restaurants. In fact, aggressive expansion by QSRs and coffee chains have contributed to a record-low availability rate of single-tenant retail space at just 2.4%.
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Agencies Outline Enforcement Efforts Against Discrimination, Bias in Automated Systems

JOINT STATEMENT ON ENFORCEMENT EFFORTS
AGAINST DISCRIMINATION AND BIAS IN AUTOMATED SYSTEMS

Rohit Chopra, Director of the Consumer Financial Protection Bureau, Kristen Clarke, Assistant Attorney General for the Justice Department’s Civil Rights Division, Charlotte A. Burrows, Chair of the Equal Employment Opportunity Commission, and Lina M. Khan, Chair of the Federal Trade Commission issued the following joint statement about enforcement efforts to protect the public from bias in automated systems and artificial intelligence:

America’s commitment to the core principles of fairness, equality, and justice is deeply embedded in the federal laws that our agencies enforce to protect civil rights, fair competition, consumer protection, and equal opportunity. These established laws have long served to protect individuals even as our society has navigated emerging technologies. Responsible innovation is not incompatible with these laws. Indeed, innovation and adherence to the law can complement each other and bring tangible benefits to people in a fair and competitive manner, such as increased access to opportunities as well as better products and services at lower costs.

Full Statement

Appraisal Standards Board Adopts New Edition of USPAP

Originally published on May 5, 2023 by Amy Kaufman for The Appraisal Foundation.

New edition will be effective January 1, 2024

(Washington, DC) May 5, 2023 –The Appraisal Standards Board today voted to adopt the Fifth Exposure Draft of proposed changes to the Uniform Standards of Professional Appraisal Practice (USPAP). The new edition will be available this fall and will become effective on January 1, 2024. Unlike previous editions, it will not have an end date.

“Conducting this comprehensive review and revision of the Ethics Rule will benefit the profession and the public,” said Appraisal Standards Board Chair Michelle Czekalski Bradley. “The Board was pleased by the results of this process and feels that this new edition of USPAP will be an asset to appraisers and the public alike who are seeking to gain a better understanding of an appraiser’s ethical obligations and requirements under fair housing laws and regulations. Bias and discrimination have never been permitted by our standards, and now that is clear to all who read them.”


All exposure drafts are developed by the Appraisal Standards Board and released for public comment. Successive exposure drafts are updated and released based on public comments on previous drafts.




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Lack of Homes for Sale Helping to Maintain High Prices: Redfin

Originally published on April 28, 2023, by Ally Braun for Redfin.

New listings are down more than 20% from a year ago as homeowners hang onto low mortgage rates, causing buyers to snap up homes quickly and keeping prices from falling further.

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Office, Industrial and Apartment Values Down, Retail and Hotels Up: NCREIF

Originally published on April 28, 2023 by the Mortgage Banker's Association.

The National Council of Real Estate Investment Fiduciaries, Chicago, said its quarterly Property Index showed aggregate market values of properties declined for the third straight quarter; returns were negative for the second straight quarter.

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Office Buildings in Big Cities Most at Risk: Goldman Sachs

Originally published on April 25, 2023, for Goldman Sachs.

Big office buildings in large U.S. cities are the most at risk from turmoil in commercial real estate, according to Goldman Sachs Research. There are signs that smaller offices in suburbs, as well as newer buildings in central businesses districts, could be more insulated from the stress.

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Banks Worried About Falling CRE Values, Officials Say

Originally published on April 28, 2023, by Henry Simpson for US Today.

US banks are increasingly concerned about falling commercial property valuations and the risk they pose to lenders’ balance sheets, senior officials said this week.

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Home Sales Decline in March Amid Tight Inventories: NAR

Originally published on April 27, 2023, by Lauren Cozzi for the National Association of Realtors.

Pending home sales decreased in March for the first time since November 2022, according to the National Association of REALTORS®. Three U.S. regions posted monthly losses, while the South increased. All four regions saw year-over-year declines in transactions.

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Cloud Computing, AI Tech Boosting Data Center Growth: JLL

Originally published on April 20, 2023, by Michael Tucker for the Mortgage Banker's Association.

Mass adoption of cloud computing and artificial intelligence is driving exponential growth for data centers, reported JLL, Chicago.

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Concerns Over Small-cap vs. Large-cap CRE Performance Unwarranted: Boxwood Means

Originally published on April 17, 2023, by Michael Tucker for the Mortgage Banker's Association.

Small-cap commercial real estate appears to be in better shape than the larger CRE market, reported Boxwood Means LLC, Stamford, Conn.

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Bipartisan Legislation Targets Appraisal Licensing Modernization

Originally published on April 26, 2023, by The Appraisal Institute. 

The Portal for Appraisal Licensing Act, known as the PAL Act, was reintroduced in the House of Representatives on April 20. The bipartisan legislation is intended to modernize the real estate appraisal licensing system to reduce costs and cut red tape for appraisers and those who use the services of appraisers. 

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Foreclosure Activity Climbs During First Quarter: ATTOM Data

Originally published on April 19, 2023, by the ATTOM Staff.

ATTOM, a leading curator of land, property, and real estate data, today released its Q1 2023 U.S. Foreclosure Market Report, which shows a total of 95,712 U.S. properties with a foreclosure filings during the first quarter of 2023, up 6 percent from the previous quarter and up 22 percent from a year ago.

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FHFA Seeks Comments on Proposed Fair Housing Rule for GSEs

Originally published on April 19, 2023, for the Federal Housing Finance Agency.

Today, the Federal Housing Finance Agency (FHFA) announced that it is seeking comment on a proposed rule that would formalize many of the Agency’s existing practices and programs regarding fair housing and fair lending oversight of its regulated entities.

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Single-tenant Net Lease Cap Rates Rise: The Boulder Group

Originally published on April 12, 2023, by the Boulder Group.

Cap rates in the single-tenant net lease sector increased during the first quarter, marking four consecutive quarters of growth, The Boulder Group reported April 6 in its Q1 2023 Net Lease Market report. Industrial cap rates rose to 6.77% while retail and office cap rates reached their highest level since the third quarter 2020 at 6.05% and 7%, respectively.

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AI Letter to FHFA Critical of Value Acceptance Program

Originally published on April 19, 2023, by the Appraisal Institute.

The Appraisal Institute on April 13 sent a letter to Federal Housing Finance Agency Director Sandra Thompson that was critical of Fannie Mae’s “value acceptance” program. AI expressed its concerns about the program's potential effect on the valuation profession. 
 
Specifically, AI said it was concerned that the value acceptance program is creating an alternative workforce of property data collectors that may negatively affect aspiring appraisers’ ability to enter the valuation profession. 
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FHFA to Host Second ASC Hearing on Appraisal Bias

Originally published on April 6, 2023, by the Federal Housing Finance Agency.

The Federal Housing Finance Agency FHFA) will host the Appraisal Subcommittee (ASC) on Friday, May 19, 2023, for its second public hearing on appraisal bias in coordination with ASC member agencies. The intent of this hearing is to explore the current regulatory framework for the appraisal industry by focusing on appraisal standards, appraiser qualification criteria, barriers to entry into the profession, and appraisal practices.

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Remote Work, Rising Home Prices Still Influence Population Migration, Data Reveals

Originally published on April 5, 2023, by Adam Ozimek and Connor O'Brien for the Economic Innovation Group.

Key Findings

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Hospitality Recovery Clouded by Underperforming Upscale Properties, Data Shows 

Originally published on April 11, 2023, by Michael Tucker for The Mortgage Banker's Association.

U.S. hotels have performed well overall since the pandemic, but upscale properties report higher commercial mortgage-backed securities delinquencies than more modest hotels, reported KBRA, New York.

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US Bank and Supervisory Rules May be too Loose and Require Review, Yellen Says

Originally published on March 30, 2023, by David Lawder for Reuters.com.

 U.S. Treasury Secretary Janet Yellen said on Thursday that banking regulation and supervisory rules need to be re-examined in the wake of the Silicon Valley Bank (SIVB.O) and Signature Bank (SBNY.O) failures to ensure current banking system risks are addressed.

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Baby Boomers Now Largest Generation of Homebuyers: NAR

Originally published on March 28, 2023, by Spencer High for the National Association of Realtors. 

The share of baby boomers has surpassed millennials and now makes up the largest generation of home buyers, according to the latest study from the National Association of Realtors®.

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