Sector News at 2021 Q2

Sector News through 2021 Q2

In case you missed it, here is a selection of sector news items and discussions from trusted sources.

Big news – NMHC Annual Meeting 2021 live and in person!

Recordings of all our general sessions are available to NMHC members here.

After nearly 18 months of pandemic isolation, the National Multifamily Housing Conference brought the commercial real estate industry back together—in person. They tackled the most pressing issues facing our members in the next year—escalating construction costs, skyrocketing insurance, accessing myriad rental assistance programs, strategies to deploy capital in a sellers’ market, and meaningfully advancing diversity, equity and inclusion.

Navigating Rental Assistance, Securing Funds and Tools for Communicating with Residents
View recorded session.

Securing emergency rental assistance was one of NMHC’s top legislative priorities during the pandemic. This session brought industry leaders together to explore how they are navigating the myriad state and local rental assistance programs. They also shared how protracted federal and state eviction moratoriums have affected them and what steps they have taken to mitigate their financial and legal exposure.

NMHC Focused on Rent Assistance, Tax Policy and Housing Affordability
Click through to learn more about NMHC’s top policy priorities.

NMHC highlighted the COVID and non-COVID legislative and regulatory wins over the last year, and provided insights on the current state of play as it relates to housing affordability, evictions and infrastructure. The team also explained NMHC’s months-long advocacy efforts to push for the enaction and efficient implementation of the emergency rental assistance program. Lastly, NMHC discussed the potentially negative impacts of the President’s proposed tax plan and how NMHC will work to guard against such policies.

What a Long, Strange Trip It’s Been: From the Pandemic to Recovery and Beyond
View recorded session.

As the pandemic seems to be giving way to a strong economic rebound, there are still a number of questions around what the pandemic’s hangover effect will be on the apartment market longer term. After wrapping the final NMHC Rent Payment Tracker webinar, market analysts from leading property management firms took the stage to share their views on the state of the market and where the opportunities are beginning to show.

CRE Industry Risk Environment

Rethinking Multifamily Risk Post-COVID
By Natalie Dolce | June 10, 2021 | Posted on

These days risk mitigation is more than just insurance—it’s the ability to run a business under adverse and unpredictable conditions. The pandemic has forced organizations to make massive operational changes that have impacted the balance sheet, scattered the CRE workforce and exposed the industry to new levels of risk. Read full article. View recorded session.

White House warns companies to step up cybersecurity
Reuters | June 3, 2021 | Posted on

The White House warned corporate executives and business leaders on Thursday to step up security measures to protect against ransomware attacks after intrusions disrupted operations at a meatpacking company and a southeastern oil pipeline. The recent cyberattacks have forced companies to see ransomware as a threat to core business operations and not just data theft, as ransomware attacks have shifted from stealing to disrupting operations. Read more here. See WHI letter to business leaders here. See also Executive Order on Improving the Nation’s Cybersecurity

Construction Costs, Materials Shortages

NMHC Survey Dives into Record Construction Costs, Delays
By Natalie Dolce | June 10, 2021 | Posted on

During the most recent iteration of NMHC’s Construction Survey, 83% of respondents reported experiencing construction delays in jurisdictions where they operate, an increase from the results reported in each of the prior six rounds. Read full article.

NAHB: The Government Understands the Lumber Crisis
Commerce Secretary Gina Raimondo “knows lumber is really a drag on us right now.”
By Ted Knutson | June 10, 2021 | Posted on

National Association of Homebuilders Chief Lobbyist Jim Tobin said in a recent NAHB podcast he is optimistic the government is going to try to do the right thing to solve the lumber crisis. “They clearly understand the crisis. Clearly, they understand domestic supply is not meeting demand. The meeting struck all the right tones. I think she really wants to solve this problem. She knows lumber is really a drag on us right now,” said Tobin who praised Raimondo for her data savvy, her good relationship with the industry in Rhode Island where she had been governor and for taking notes during the meeting. Read full article.

Update: Lumber Prices Suddenly Move Downward
By Erik Sherman | June 15, 2021 | Posted on

Builders are feeling relief, unless they had stocked up on product expecting an extended period of elevated prices. Read full article.

Post-COVID Sector Trends

Cap Rates Facing Downward Pressure for Many Types of CRE
“Investors flush with lots of capital are looking for properties to buy.”
By Ted Knutson | June 16, 2021 | Posted on

Cap rates are facing significant downward pressure for many types of commercial real estate from apartments to self-storage facilities to hotels and industrial properties. Buzz of large investors - cap rates for larger properties 100 units and up have been pushed down to the 5% range in smaller markets. Read full article.

New Data Show Few Companies Will Dramatically Reduce Office Footprint
But hybrid work will still be a part of many companies’ plans.
By Lynn Pollack | June 11, 2021 | Posted on

Just nine percent of companies surveyed by CBRE plan to significantly shrink their office portfolios, a figure that’s far less than last year’s 39%. Of the 185 companies surveyed by the CRE giant in its Spring 2021 Occupier Survey a whopping 85% say they expect employees to spend at least half of their time in a physical office. The majority of large companies—72%—appear to be planning for what CBRE calls “modest” office-space reductions; smaller companies report they’re more likely to keep their portfolio the same or grow it. Read full article. Later coverage available here.

New Retail Sales Forecast for 2021 Significantly Exceeds Earlier Prediction
Sales now expected to top $4.44 trillion this year.
By Les Shaver | June 11, 2021 | Posted on

The National Retail Federation has revised its annual forecast for 2021, projecting that retail sales will now grow between 10.5% and 13.5% to between $4.44 trillion to $4.56 trillion this year. In February, NRF projected that retail sales would grow 6.5%. By comparison, retail sales totaled $4.02 in 2020. Non-store and online channels accounted for $920 billion of purchases. Read full article.

Opportunity Zone Fund Launched with Eye on Data Center Demand
What makes Redivider’s play so interesting is the focus on cryptocurrencies as a driver for data centers.
By Les Shaver | June 11, 2021 | Posted on

Redivider is launching the Redivider Blockchain Opportunity Zone Fund, which will invest in data center locations nationwide. Opportunity Zones, at least among the CRE community, are better known for more traditional investments, such as affordable housing. However, OZs can accommodate any real estate asset category, including data centers. What makes Redivider’s play so interesting is the focus on cryptocurrencies—with their high energy and computing needs—as a driver for data centers. Read full article.

CRE Still Needs to Catch Mobile, Now More Than Ever
Is the commercial real estate industry also ready?
By Erik Sherman | June 14, 2021 | Posted on

After a year of pandemic stay-at-home-please angst, vaccination rates are up, states are reopening, and millions are out and about again, mobile devices to the ready. Is the commercial real estate industry also ready? Probably not and that will hamper them. “In my experience, most commercial real estate agencies are far behind the times when it comes to website technology, especially when compared to the residential market,” says Mike Willman, owner of digital consultancy Willman Web Services. Read full article.

CRE Assets Without ESG Upgrades Risk 'Becoming Obsolete'
Many markets are beginning to see potential price discounts due to poor ESG performance.
By Lynn Pollack | June 15, 2021 | Posted on

As ESG continues to be a top priority for both investors, occupiers and end users alike, poor-performing assets may experience price discounts, CBRE experts predict. The firm’s 2021 Global Investor Intentions Survey shows that investors intend to deploy even more capital this year—potentially 15% to 20% more than last year—as the global economy continues to recover from COVID-19 woes. And as those investors, together with consumers and tenants, sharpen their collective focus on ESG initiatives, “real estate assets that are not upgraded accordingly run the risk of becoming obsolete. Read full article.

BTR/SFR – Is This the Asset Diversification Move for Portfolio Resilience?
View NMHC recorded session.

Apartment communities were not the only product-type to demonstrate resilience during 2020. Single-family Rental (SFR) and Build-To-Rent (BTR) are quickly changing market segments that have gained the attention of institutional investors and housing owners and operators. In the meeting’s closing session, members working in this business model discussed the demand drivers and characteristics of this product-type and why they anticipate more capital expenditures to flow into this segment of the housing stock, and more.

Sector News through 2021 Q2 Real Estate.jpg?ver=2021-06-18-201930-583In case you missed it, here is a selection of Commercial Real Estate sector news items and discussions from trusted sources.2021-06-18T19:00:00-05:00In case you missed it, here is a selection of Commercial Real Estate sector news items and discussions from trusted sources.NoneReal EstateNo