CRE X-Factor – The End of the Beginning for the CRE Adjustment?

By Xander Snyder on September 15, 2023
With interest rates high, transaction volumes low, and property prices generally on the decline, it’s safe to say that the commercial real estate (CRE) market is undergoing an adjustment period. The market adjustment has triggered a process referred to as “price discovery,” in which many buyers are sitting on the sidelines waiting for lower entry ... Read More

Commercial Real Estate CRE X-Factor

Banks Continue to Report Tighter Lending Standards for CRE

By Xander Snyder on September 5, 2023
With interest rates well above recent lows and commercial property prices declining, commercial real estate (CRE) credit remains tight. How tight, exactly, is one of the questions that the Federal Reserve’s Senior Loan Officer Opinion Survey (SLOOS) attempts to answer. Read More

Commercial Real Estate

CRE X-Factor – Why Operating Costs for Commercial Properties have Soared

By Xander Snyder on August 10, 2023
As rent growth has softened across all asset classes, property owners and operators have increased their focus on limiting expense growth. However, this has proven difficult for some line items, as both property insurance, and repairs and maintenance (R&M) expenses have increased significantly over the last three years. In this edition of the ... Read More

Commercial Real Estate CRE X-Factor

What Happens to Cap Rates if…

By Xander Snyder on August 7, 2023
Multifamily capitalization (cap) rates have now increased for three consecutive quarters, the first time since the Great Financial Crisis. This is a sign that investors are requiring higher yields today in order to purchase a property. Read More

Commercial Real Estate Potential Cap Rate Model

Buyers Have the Upper Hand in the Multifamily Market

By Xander Snyder on July 21, 2023
When you purchase an apartment building as an investment, you’re generally planning to profit through the rent it generates and through price growth of the building over time. When prices are falling, as they are today, investors are less able to reliably predict where prices will end up during an investment’s lifetime. To offset this increased ... Read More

CRE X-Factor – Assessing the State of the CRE Reset

By Xander Snyder on July 12, 2023
The commercial real estate (CRE) market is in a reset. Deal activity is down, and property prices are declining. We recently examined what clues history can provide about the potential length and depth of CRE price declines. Today, let’s examine what current CRE fundamentals can tell us about where we are in the process of resetting. Read More

Commercial Real Estate CRE X-Factor

CRE X-Factor - When Will Commercial Property Prices Recover?

By Xander Snyder on July 10, 2023
The data is clear – commercial real estate (CRE) property prices are undergoing an adjustment. With that in mind, many industry professionals and investors are asking the next logical questions – how far will prices fall and when will prices bottom out and recover. Examining historical CRE data offers some clues, but, as the old adage goes, ... Read More

Commercial Real Estate

Have Investors Lost Interest in the Single-Family Rental Market?

By Xander Snyder on July 6, 2023
From February 2020 to May 2022, investor purchases of single-family homes grew nationwide, increasing from an average share[1] of 12.4 percent of homes purchased across the largest 50 metropolitan markets to 20.4 percent. Over the past year, however, as interest rates rose and house prices declined, investors pulled back from many single-family ... Read More

You Can’t Build What You Can’t Fund

By Xander Snyder on June 19, 2023
Securing commercial real estate (CRE) financing in today’s market is no easy task. After the three bank failures this year, which triggered increased regulatory scrutiny of bank-held CRE loans, banks have pulled back on lending. This is especially true for riskier varieties of lending, such as construction loans, which involve assets that are not ... Read More

Commercial Real Estate

Bank Pull Back Creates Construction Lending Opportunity for Debt Investors

By Xander Snyder on June 12, 2023
Building a property from the ground up entails substantially more risk than purchasing an existing building that is already generating income. Likewise, financing construction is riskier than lending against existing structures since development projects don’t generate income to pay loan interest until they are completed. For this reason, most ... Read More

Commercial Real Estate

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