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Hotels in City Centers Still Struggle as Other Hospitality Properties Recover: Data

Originally published on September 22, 2021 by Shira Petrack for Placer

Our latest whitepaper analyzes the tourism and travel recovery following a year and a half of extraordinary challenges. We dove into foot traffic data for cities, states, hotels, airports, and tourist attractions across the countries to understand how the pandemic impacted – and continues to impact – these critical industries. 

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LEED-certified Assets Cost More to Build, Command Higher Prices: Cushman & Wakefield

Originally published by Jacob Albers and David Bitner for Cushman & Wakefield.

As investor interest in ESG strategy rises, LEED-certified office provides a key indicator on comparative performance By 2023, 80% of investors intend to incorporate ESG into their strategy.

As demand for ESG-committed assets has grown, a key question has arisen: do these assets perform the same or better than their non-ESG peers? If so, is it possible to quantify this difference?  

Key takeaways:  

  • LEED-certified buildings have consistently achieved higher rents compared to their non-LEED counterparts. 

  • Attaining ESG commitment through LEED certification does come at higher cost through construction or renovation.  

  • LEED-certified assets outperform during recession-recovery periods. 

  • The pandemic accelerated tenant demand for ESG assets. 

  • LEED-certified assets held a 21.4% higher average market sales price per square foot over non-LEED buildings during the past three years. 

  • Sustainable assets are still fairly niche, with LEED certification accounting for just 2.5% of the total urban office inventory in the United States.   
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Cap Rates in Quick-service Sector at Historic Low: Report

Cap rates in the net lease quick-service sector reached a historic low of 5.26% during the second quarter, down 39 basis points from last year, according to the Q2 2021 Net Lease QSR Market Report released Sept. 1 by The Boulder Group. Cap rates for corporate-leased QSR properties dropped 20 basis points to 5%, while properties leased to franchisees dropped 43 basis points to 5.4%.

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Younger Generations Become Pandemic Homebuyers: Report

Originally published on May 26, 2021, by George Ratiu for Realtor.com.

Pandemic Homebuyers Are Happy With Their Homes

  • One-in-four recent homeowners purchased because of the pandemic
  • Majority of recent buyers bid at or above the asking price
  • 70% of recent homebuyers feel good about purchasing decision
  • 75% of recent homebuyers are happy with their homes
  • Over 70% of recent homebuyers are happy with their communities and neighborhoods
  • Three-in-four recent buyers bought a home that fits their needs
  • Over half of recent buyers found homes suited for remote work

The past year has seen a noticeable seesaw in real estate activity, as markets traversed the challenges of the COVID pandemic. Housing started in 2020 with a significant shortage of new homes and an inventory of existing ones. As 4.7 million millennials turned 30 and embraced homeownership, the demand for homes was driving prices higher at a healthy clip. The mid-March 2020 quarantines put a stop to most transactions, leading to a sharp drop in activity until June. As the lockdowns were lifted, Americans reacted to the trifecta of social distancing, remote work, and dropping mortgage rates by rushing out of downtowns and into suburbs, as well as smaller cities and towns across the country. People focused on communities with a higher quality of life, larger homes, and a more affordable cost of living.

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Large Number of Potential Homebuyers Looking to Relocate, Redfin Reports

Originally published on May 26, 2021, by Redfin.

The Wave of Pandemic-Era Relocations Continued in April, With Nearly 31%
of Homebuyers Looking to Move to Another Metro

While relocations eased slightly in April from the first quarter, the share of people moving from
one part of the country to another is still well above pre-pandemic levels

SEATTLE, May 26, 2021 /PRNewswire/ -- (NASDAQ: RDFN) — Nationwide, 30.6% of Redfin.com users looked to move to a different metro area in April, down slightly from 31.5% in the first quarter but up from 26% at the same time last year, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage.

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East Coast and Illinois Face Biggest COVID-related Housing Risks: Data Shows

Originally published on April 22, 2021, by ATTOM Staff for ATTOM Data Solutions Blog.

IRVINE, Calif. — Apr. 22, 2021 — ATTOM Data Solutions, curator of the nation’s premier property database, today released its first-quarter 2021 Special Coronavirus Report spotlighting county-level housing markets around the United States that are more or less vulnerable to the impact of the Coronavirus pandemic that continues to impact the U.S. economy. The report shows that states along the East Coast, as well as Illinois, were most at risk in the first quarter of 2021 – with clusters in the New York City, Chicago and southern Florida areas – while the West continued to face less risk.

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Homebuyer, Seller Sentiment Up, Mortgage Outlook Down, Fannie Mae Index Shows

Originally published on April 7, 2021, by Fannie Mae.

WASHINGTON, DC – The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) increased in March by 5.2 points to 81.7. Four of the HPSI’s six components increased month over month, including the components related to homebuying and home-selling conditions, household income, and home prices. The mortgage rate outlook component experienced only a decline, and the latest results indicate that only 6% of consumers believe that mortgage rates will decrease over the next 12 months. Year over year, the HPSI is up 0.9 points.

“The significant increase in the HPSI in March reflects consumer optimism toward the housing market and larger economy as vaccinations continue to roll out, the third round of stimulus checks was distributed, and the spring homebuying season began – perhaps with even more intensity this year since 2020’s spring homebuying season was limited by virus-related lockdowns,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Home-selling sentiment experienced positive momentum across most consumer segments – nearly reaching pre-pandemic levels and generally indicative of a strong seller’s market. Consumers once again cited high home prices and tight inventory as primary reasons why it’s a good time to sell.  Alternatively, while the net ‘good time to buy’ component increased month over month, it has not recovered to pre-pandemic levels, as the home buying experience continues to prove difficult for many of the same reasons, namely high prices and a lack of supply.”

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CFPB Looks to Ban Foreclosure Starts Until 2022

Originally published on April 5, 2021, by The Consumer Financial Protection Bureau (CFPB).

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today proposed a set of rule changes intended to help prevent avoidable foreclosures as the emergency federal foreclosure protections expire. Due to the COVID-19 pandemic and ensuing economic crisis, millions of families nationwide have suffered the loss of income and nearly 3 million homeowners are behind on their mortgages. The CFPB’s proposal seeks to ensure that both services and borrowers have the tools and time they need to work together to prevent avoidable foreclosures, recognizing that the expected surge of borrowers exiting forbearance in the fall will put mortgage servicers under strain.

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AI Answers: A Walk Through “The Appraisal of Real Estate,” 15th Edition

AI Answers, with Jeff Sherman, Steve Roach, Leslie Sellers, and Bill Garber, spotlights the newly released “The Appraisal of Real Estate,” 15th edition, a peer-reviewed Appraisal Institute text and an authoritative source of recognized methods and techniques for valuation practitioners.  

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Economy is Expected to Expand Nearly 7% This Year, Fannie Mae

Originally published by Fannie Mae on February 18, 2021. 

Fiscal Stimulus, Successful Vaccine Deployment Likely to Boost Growth but Also Pose Inflationary Risk

WASHINGTON, DC – The U.S. economy is expected to grow 6.7 percent in 2021, an improvement not only from last year’s 2.5 percent contraction but up, too, compared to last month’s forecast of 5.3 percent, according to the February 2021 commentary from the Fannie Mae (FNMA/OTCQB) Economic and Strategic Research (ESR) Group. The latest forecast upgrade of full-year 2021 real GDP growth reflects greater-than-expected consumer spending in the winter months, slowing COVID-19 case rates and hospitalizations, and the likelihood of an impending fiscal stimulus package. However, the ESR Group notes that some of the expected growth quickenings stem from a pull-forward of growth that was previously expected to take place in 2022; subsequently, its forecast of full-year growth in 2022 decreased 0.8 percentage points this month to 2.8 percent. The ESR Group’s updated forecast also highlights greater uncertainty and downside risks, including stronger inflation and higher interest rates, as well as potentially weaker growth if COVID-related restrictions persist beyond the spring.

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New Supply of Office Buildings Adds to Vacancy Woes: Report

By Michael Tucker

Cushman & Wakefield, Chicago, reported the recession that began in March is still being felt in the U.S. office market.

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Colliers Survey Shows ‘Surge’ in Commercial Property Investment Expected This Year

Leading diversified professional services and investment management firm Colliers International Group Inc. (NASDAQ and TSX: CIGI) reveals investors are largely optimistic about a market rebound in 2021, according to its new Global Capital Markets 2021 Investor Outlook. Colliers’ research anticipates a 50 per cent surge in investment activity in the second half of the year, pointing to a broad-based renewal of confidence in the property market as a result of recent vaccine developments and continued government stimulus.

“Based on our global analysis, which gives us a bird’s-eye view of investors’ interests and expected appetite, longer-term tailwinds in the property sector remain intact. With a massive volume of equity raised globally and the need for real assets, investors are eager to deploy pent-up capital and pursue opportunities during the year,” said Tony Horrell, Head of Capital Markets | Global at Colliers International. “We expect to see movement up the risk curve this year, with investors exploring all types of assets from senior care homes to public infrastructure projects.”

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Moratorium on Foreclosure Activity Results in Record Low Filings in 2020, Data Shows

Foreclosures were 57% lower in 2020 than in 2019, reaching a record low of 214,323 filings on residential properties — 0.16% of all housing units — due to the government moratorium, analytics firm ATTOM Data Solutions reported Jan. 14. The highest foreclosure rates were reported in Delaware, Illinois and New Jersey.

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Residential Activity Strong, CRE Struggles: Fed Beige Book

Residential real estate activity remained strong in many fed districts even as home prices increased due to inventory shortages, but commercial activity still struggled amid weak conditions, according to the latest Beige Book released Jan. 13 by the Federal Reserve.

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Homebuying Sentiment Declines After 3 Months of Growth, Fannie Mae Reports

The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) fell 1.7 points in November to 80.0, the first decline after three consecutive months of increases. Three of the six HPSI components decreased month over month, with consumers reporting a more pessimistic view of homebuying conditions, including mortgage rate expectations, but a more optimistic view of home-selling conditions and home prices. Moreover, consumers also reported mixed results regarding job loss concerns and household income changes. Year over year, the HPSI is down 11.5 points.

"The HPSI appears to have peaked for now as consumers continue to consider how COVID-19 impacts their ability to buy or sell a home," said Doug Duncan, Senior Vice President and Chief Economist. "This follows the HPSI's recovery of slightly more than half of the loss experienced during the first few months of the pandemic."

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Survey Reveals Continued Challenges for Commercial Real Estate Sector: Deloitte

By Jim Berry and Kathy Feucht

The impact of COVID-19 on the global economy and the CRE industry has made 2020 the most memorable year in recent history. CRE companies have needed to digitize operations, close physical facilities due to extensive lockdowns, and prepare for reopening, while ensuring the health and safety of employees and occupiers and considering the financial health of tenants and end users.

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Nearly Half of Office Tenants Likely to Reduce Square Footage, BOMA Survey Reveals

By David Kitai

A study of the COVID-19 pandemic’s impact on commercial real estate, commissioned by the Building Owners and Managers Association International (BOMA), has found that office users face widespread economic challenges but many remain convinced that in-person workspaces are crucial to their operations. They noted, as well, that landlords and property managers have successfully adapted to new needs during the pandemic.

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Home Prices in Opportunity Zones Rise at Slower Pace than National Average: Data

 ATTOM Data Solutions, curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), today released its third-quarter 2020 special report analyzing qualified Opportunity Zones established by Congress in the Tax Cuts and Jobs act of 2017 (see full methodology below). In this report, ATTOM looked at 1,737 zones with sufficient sales data to analyze, meaning they had at least five home sales in the third quarter of 2020.

The report found that median home prices increased from the third quarter of 2019 to the third quarter of 2020 in 74 percent of the zones and rose by more than 10 percent in slightly more than half the zones.

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Single-family Home Prices Up in All Metros During Q3: NAR

Every metro area tracked by the National Association of Realtors® during the third quarter of 2020 saw home prices increase from a year ago, according to NAR’s latest quarterly report, released today.

Due in large part to record-low mortgage rates and depleted nationwide housing inventory, median single-family home prices grew year-over-year in all 181 metropolitan statistical areas1 tracked by NAR, as every measured market showed sales price gains.

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Industrial Sector Shows Some Signs of Weakness: Moody’s

Moody’s Analytics today announced new forecasts for commercial real estate (CRE) rents and vacancies, covering eight property types and more than 3,000 submarkets across the United States. The forecasts reflect the latest Q3 data on US CRE markets collected and curated by the Moody's Analytics CRE Solutions group.

Throughout 2020, industrial properties such as warehouses used for storage and distribution of goods have likely benefited from an acceleration of e-commerce sales, even as brick-and-mortar retail floundered amid the coronavirus pandemic. The sector will likely not remain unscathed over the next year as a surge in COVID-19 cases forces further shutdowns and a fall in international trade volumes weighs on the manufacturing industry. Industrial property vacancy rates are expected to rise to 11.8% in 2021, and the sector is predicted to incur its biggest drop in effective rents in 10 years, down 4.5% in 2021.

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