Commercial Real Estate News Wrap Up: September 29, 2015
Filing for construction permits for multifamily is normalizing after a tax-incentive program in New York City expired on June 15th. Filings reached a high of 1.3MM permits in June. That’s the highest level nationwide since July 2007, according to an article in Multifamily Executive. “The fall-off in permits is a return to normal activity after May-June numbers were substantially inflated by New York City,” said Ron Witten, president of Dallas-based Witten Advisors. “There was a tax-incentive program scheduled to expire June 15, so a massive jump in ‘starts’ occurred to make projects eligible for this program.”
Federal Reserve Chairwoman Janet Yellen clearly signaled that the Fed expects to raise rates by the end of the year. Included in her September speech was commentary on jobs saying the nation is close to full employment. “The unemployment rate, which peaked at 10 percent in 2009, is now 5.1 percent, slightly above the median of FOMC participants’ current estimates of its longer-run normal level. Although other indicators suggest that the unemployment rate currently understates how much slack remains in the labor market, on balance the economy is no longer far away from full employment,” she said.
Just because the national CMBS delinquency rate went up in August doesn’t mean it hit all MSAs equally. Trepp says that its numbers show that it’s “too close to call.” Delinquency rates for 29 of the 58 qualifying MSAs increased last month, 27 MSAs showed improvement and two markets had no change. “The data does reveal that areas with high delinquencies are recovering. Of the 10 markets with the highest delinquency rates, six improved in August. Notable rate decreases occurred in Atlanta (-1.15%), Sacramento (-0.97%), Dayton (-1.57%), and Akron (-1.24%),” Trepp reported.
The storage sector is growing everywhere you look and Texas is no exception as Public Storage opens a new facility outside of Dallas.“Everyday changes in people’s lives create the demand. We call it the four Ds: divorce, death, disaster and dislocation,” Clemente Teng, the company’s Vice President, Investor Relations stated in a story on Commercial Property Executive’s website. Expansion and acquisition of storage facilities is continuing across the nation. The site reports that Your Space Self Storage recently acquired a 10-building storage portfolio located in Hudsonville, Michigan, its fifth such facility in that area.
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