“The spread between secondary and primary seems to be closing,” says Ben Thypin, senior market analyst for RCA. “That could be a function of just a few very aggressive transactions in the secondary markets, or it could be something larger.”
Despite this movement toward secondary markets, RCA says core properties still command a premium. Part of the reason for that is there’s simply not enough core property available in some markets. Thypin thinks a possible Archstone sale could alter this dynamic, depending on how it’s broken up.
“[Archstone has] a lot of product in New York,” he says. “There’s not a lot of attractive product in New York, at least on the institutional side, because pricing is just insane. The chance of getting a real foothold in this market with several properties could lead a REIT to make a big investment [there]. Some markets are deep enough that it won’t have an effect. But in some markets that are starved for inventory, it could have an impact.”
But that impact won’t be felt in the fourth quarter, because, despite the recovering sales pace through 2011, a lot remains to be determined in the last quarter of the year.
“In the third quarter, a lot of people are away during August and it slows down a little bit. The fourth quarter is typically very active, so it should be really interesting to see whether this little slump during the third quarter is a bump in the road or maybe a trend," Thypin says.
Read More: http://multifamilyexecutive.com/dispositions-and-transactions/apartment-sales-volumes-remain-strong.aspx
Foreign capital has piled into big, multi-family apartment blocks and residential homes in the US in the past year as investors seek a global safe haven in increased American demand for rental property.
In absolute terms, the dollar volume of foreign purchases of multi-family property to September 2011 has exceeded 2010’s full-year total by 73 per cent, according to data by Real Capital Analytics. Ben Thypin, director of market analysis at RCA, said he expected the year-on-year gain to be close to 100 per cent.
“Investors are seeking less risky assets whose value won’t be as volatile as many of the other investment opportunities available in this turbulent global economy,” said Mr Thypin.
Foreign investment represents 5.8 per cent of all multi-family purchases, up from 3.7 per cent in 2010, according to RCA.
A weaker dollar, international market volatility and a continuing foreclosure crisis have combined to create an unlikely safe haven for international investors.
Read more: http://www.ft.com/intl/cms/s/0/d447df46-f8ce-11e0-ad8f-00144feab49a.html#axzz1btrUxkqP
The auction of Anglo Irish Bank's troubled $9.5 billion U.S. loan portfolio has surprised some industry observers -- and spread fear among some borrowers, who worry about having new lenders take over their troubled projects.
Ben Thypin, a Director of Market Analysis at Real Capital Analytics, said the fact that three lenders divvied up Anglo Irish's portfolio was" not particularly unexpected."
"No one but a bank could really afford to buy the performing loans, so the performers and non performers inevitably went to different buyers," he said.
Read More: http://therealdeal.com/newyork/articles/behind-the-deal-assessing-anglo-s-auction
Although volatility in the capital markets over the summer - especially following the downgrade of U.S. Treasuries on Aug. 5 - has spooked commercial mortgage-backed securities (CMBS) market participants, this financing source is definitely back, say experts, while not as strong as anticipated earlier in the year. I In 201 1, new CMBS issuance may not top $30 billion, far below estimates of $30 billion to $50 billion early in the year. Still, anywhere from $5 billion to $8 billion was in the CMBS pipeline as of the end of August.
..."CMBS has a smaller proportion of commercial real estate originations than at the height of the market in 2007, when it accounted for over 50 percent of the volume of new originations," says Ben Carlos Thypin, director of market analysis at RCA.
"In 2011, as of the end of August, CMBS made up about 21 percent of commercial real estate origination volume - slightly down from 26 percent for all of 2010, but higher than in 2009 when it accounted for only 10 percent of commercial real estate originations."
CMBS competes with a variety of lending sources, including foreign and domestic banks, thrifts, life insurance companies, and Fannie Mae and Freddie Mac, with the last two sources only competing in the multifamily arena.
..."Deals financed by CMBS are less likely to happen in primary markets, because there is more competition for loans in those markets," adds Thypin. "Players like big insurance companies, and foreign banks are less inclined to go out of major international cities likeNew York and San Francisco, so they offer more favorable terms in those markets to attract borrowers - terms that are better than what CMBS can offer," he says. "As a result, CMBS is restricted to smaller assets in primary markets and strong assets in secondary and tertiary markets."
And the CMBS market is limited in other ways. "Despite the CMBS market having made a comeback, it hasn't come back enough to allow for very large loans that get distributed across several different bond issues," says Thypin.
"Now, people are concerned that the market could freeze up or slow down, so it isn't operating consistently enough for a conduit lender to be able to make such large loans," he says. "The issue here is that there are not many large CMBS loans being made on single properties, because the risk is so concentrated in that single property/' adds Thypin.
"However, some large CMBS loans are being made on large portfolios," says Thypin. "For example, Wells Fargo, Deutsche Bank and Barclays recently teamed up to provide $1.4 billion in debt for a portfolio of 107 shopping centers owned by Blackstone, $1 billion of which was securitized," he says. "A CMBS lender can make such a loan and turn it into a single CMBS bond issue. These types of loans are being made today because collateral is spread out and so is the risk," says Thypin.
Read More: http://insurancenewsnet.com/article.aspx?id=291181&type=newswires
Blackstone Group LP, the world’s largest private-equity firm, agreed to pay $1.08 billion to buy Duke Realty Corp.’s suburban office holdings in U.S. cities including Chicago, Dallas and Atlanta.
Blackstone Real Estate Partners VII will buy the 82 buildings with a combined 10.1 million square feet (938,000 square meters) of space, Indianapolis-based Duke Realty said in a statement. They include “substantially” all of Duke’s wholly owned suburban office properties in the Midwest and South.
Blackstone has invested more than $7 billion in real estate this year, and has raised $4 billion for its latest property fund that the New York-based firm expects to exceed $10 billion, Chairman Stephen Schwarzman said yesterday. Managers such as Fortress Investment Group LLC, Colony Capital LLC and Starwood Capital Group LLC also are pitching new property funds.
“Blackstone has a lot of capital to deploy so they need to deploy it in large chunks,” Ben Thypin, director of market analysis for New York-based Real Capital Analytics Inc., said in a telephone interview. “It seems like they got a good discount to what comparable properties have been trading for in those regions, especially considering how well-leased and relatively new the properties are.”
Read More: http://www.businessweek.com/news/2011-10-21/blackstone-to-buy-suburban-u-s-offices-for-1-08-billion.html
The sale of the Shea Scottsdale shopping center just outside Phoenix helps explain a curious phenomenon taking place in retail real estate.
On one hand, one would expect investors to be shunning grocery-anchored shopping centers, which have been suffering from high vacancy and anemic rent growth. New competitors have surfaced, including online shopping and monster retailers like Wal-Mart Stores Inc. and Target Corp., that offer aisles of discounted food.
On the other hand, so far this year investors have snapped up $7.9 billion of retail centers with supermarkets, sending volume up 68% from the $4.7 billion sold in all of 2010, though the level is still well below the peak in 2007, according to Real Capital Analytics Inc., a real-estate research firm. The U.S. sales volume of all other retail properties rose 32% to $20.8 billion this year to date, from $15.7 billion in all 2010.
...."It's a question of betting on the right grocer in the right location," says Ben Carlos Thypin, director of market analysis with Real Capital.
Read More: http://online.wsj.com/article/SB10001424052970203658804576637400614107410.html?mod=googlenews_wsj
Steinhardt and Allan Fried, an independent real estate adviser to the former hedge-fund manager, disclosed in March that they had purchased the former Amex site and an adjacent building in Manhattan’s financial district for $65 million in cash. At about that time, they entered into the agreement with JPMorgan’s private bank to borrow money against some of the family’s artwork, at rates that were much lower than those for commercial real estate projects, David Steinhardt said.
The younger Steinhardt declined to give an update on the plans for the project, which Fried described in a Wall Street Journal interview published in March as converting the main exchange building into a retail and hotel complex and tearing down the other to make way for a 60-story residential tower.
This type of mixed-use project would likely cost at least $250 million when the price tag for the properties is included, according to Ben Carlos Thypin, director of market analysis for Real Capital Analytics Inc. in New York. David Steinhardt declined to comment on the estimate.
Read More: http://www.bloomberg.com/news/2011-10-18/steinhardt-pledges-picassos-for-real-estate-as-art-loans-surge.html
The market for bonds backed by commercial real estate recovered over the last 18 months but growth in the third quarter has stalled, said property market researchers Friday.
"There's been a little bit of a stumble in the third quarter," said Ben Thypin, director of market analysis for Real Capital Analytics, a commercial real estate research firm, in a presentation at the Appraisal Institute's annual fall conference in San Francisco.
.....While CRE sales volume has fallen to less than half its level in 2007, all segments of the market have clocked gains over the past year, according to data from Real Capital Analytics.Senior living properties saw more than a fourfold increase in sales volume in the first half compared with the first six months of 2010, followed by hotel and multifamily properties. About $23.1 billion in apartment properties in changed hands in the January-June period.
Apartments exist in a "parallel universe" from other CRE properties because of their access to Fannie Mae and Freddie Mac financing, said Thypin.
"The foreclosure crisis in the single-family market has helped the apartment market," he said.
Read More: http://www.housingwire.com/2011/10/14/cmbs-market-stalls-in-third-quarter
Nat Rockett, of Cushman’s capital markets group, said this is a good sign for the market as a whole—“If one asset category is rising, it will tend to bring the others with it … All boats tend to rise,” he said. Meaning those pushed out of investing in Class-A space will naturally gravitate to Class-B, and so on. Not everyone is sure that will work, however. “While the trophy sales make the aggregate figures look promising, the lower-quality assets aren’t necessarily benefiting from the increased demand … Sales may actually be dampening the market for lower-quality assets, as the high-priced sales inflate the pricing expectations,” said Ben Carlos Thypin, director of market analysis at Real Capital Analytics.
Read More: http://www.observer.com/2011/10/investment-sales-in-new-york-city-on-top-again/
Commercial property values have fallen 45.7 percent nationwide from their peak in October 2007, according to Real Capital Analytics, a research and consulting firm in New York.
Real Capital has identified 82 distressed commercial properties, or 12 percent, in the Richmond and Norfolk metropolitan areas.
"Richmond isn't as distressed as other places like Vegas, Miami and cities in the Rust Belt, but still more distressed than major markets like Manhattan, San Francisco, Los Angeles, Chicago and even Richmond's neighbor, the D.C. metro" area, said Ben Thypin, director of market analysis for Real Capital Analytics.
Ben Carlos Thypin
I am currently the co-founder of Quantierra, the world's first data driven real estate brokerage and investment manager. In my former life as Director of Market Analysis at Real Capital Analytics, I worked with press outlets large and small to provide them with great data and insightful commentary. Here are some of the results of this collaboration. For the rest, please check out the News Archive.