With cap rates at rock bottom and interest rates rising, many investors believe we are at or beyond the peak of the current market cycle. Add a resurgent stock market to the mix and investors may see more attractive yield alternatives beyond real estate. That said, opportunity still exists to add value and grow rents in selected Class-B and Class-C assets throughout the Northeast. In 2017 we will be hosting a series of investor workshops in New York, Boston, New Haven and Hartford/Springfield to address these issues and more.
Investment real estate requires a business plan. To make a successful acquisition, the investor must formulate a strategy, execute on the roadmap and let fact-based data inform the decision making process. Whether you are new to real estate investing or looking to reinvest proceeds from a prior transaction to further grow your equity, keep these investment real estate best practices in mind before signing a purchase and sale agreement.
Northeast Private Client Group has reported throughout 2016 that assets in New York City and Boston are trading at record-high valuations for this cycle. In New York City, deal flow has slowed considerably since Q1-2016 and value-added investors are exploring opportunities in submarkets outside the City including Connecticut and the Hudson Valley. Similarly, in Boston, ranked as the third most expensive U.S. market for multifamily rents at the end of last year, valuations for income properties have hit historic highs for this cycle, as investors are increasingly less likely to bid down capitalization rates any further. Despite strong demand for multifamily and commercial assets in both markets, one is left to question if either or both of these markets may be “overvalued.”
At the peak of the last investment real-estate cycle in 2006-2007, investors borrowed hundreds of billions of dollars to finance the acquisition of investment properties from coast-to-coast. While many loans went into default during the ensuing financial crisis as building owners were unable to service the principal and interest on their obligations, the vast majority of that 10-year debt survived the crisis and is now coming due over the next 12 months. This coming wave of mortgage refinancing is just one piece of an ever-evolving real estate debt marketplace.
This post is the fourth in a five-part series that examines best practices for hiring an investment sales broker.
With investment real estate properties in New York City selling at all-time highs, many price motivated investors are selling their City assets and looking further north for opportunities to reinvest their winnings. Among the markets in which they are investing is Westchester.
For investors, there are two main ways to include real estate in their portfolios: Real-estate investment trusts (REITs) and direct investment in real estate. While direct ownership in real estate offers far greater control over the investment and its performance, REITs provide exposure to real estate without actually owning property directly.
Federal Reserve Chairwoman Janet L. Yellen told Congress Tuesday that the Fed still sees a need for its stimulus campaign while warning that the end is approaching. She said it is still concerned that despite the overall economic improvement, too many Americans continue to be unemployed or underemployed and wage growth is sluggish. She also noted that the Fed will not act until it “is reasonably confident that inflation will move back over the medium term toward our 2% objective.” Based on her remarks, it looks like the earliest interest rate hike would not be until the Fed holds its scheduled meeting at the end of July — if then.
This is the first of a two-part series on the Hartford-Springfield market. Today, multifamily and other investment properties in the Hartford, CT, market are trading more actively for the first time since the end of the recession. Part of this uptick is attributable to the higher returns that investors are seeing in secondary and tertiary markets. In fact, capitalization rates for multifamily properties in Hartford are typically 250 to 300 basis points above those for similar properties in other Connecticut cities, and up to 500 basis points above Boston and New York multifamily. While the cash returns for Hartford investors are higher than most, there is also renewed economic activity that should result in greater demand and rent growth for Hartford multifamily and commercial assets.
With Bill de Blasio taking over as the mayor of New York City after three-term pro development Mayor Michael Bloomberg, real estate industry professionals were generally puzzled about what direction the new mayor would take toward development in Manhattan as well as in the outer boroughs, like Brooklyn and the Bronx.