Partner Valuation Advisors

We recently polled the commercial real estate industry about asset values and transaction volume in 2025. Check out this video to hear the good news about how capital is expected to come off the sidelines and further fuel transactional activity across the CRE investment spectrum, especially now that the Federal Reserve has started lowering interest rates. #CRE #investment #interestrates

The U.S. multifamily market is showing signs of recovery. That's evidenced in the vacancy rate falling in the third quarter for the first time in more than two years and renter demand outpacing record new supply deliveries, according to CBRE's latest research. The multifamily vacancy rate dropped 0.2% quarter-over-quarter to 5.3%, reflecting a diminishing supply pipeline and strong renter demand. These factors are expected to push vacancy down to its long-run average of 5.0% in coming quarters. Positive net absorption of 153,300 units was one of the strongest third quarters since 1985. #CRE #multifamily #vacancies Link to CBRE report: https://hubs.la/Q02X3k0t0

The Federal Reserve Bank of New York recently pointed out a downside to the so-called extend-and-pretend loan repayment strategies that have emerged over the past few years. Glossing over problems and hoping for more favorable rates hasn't really worked. Rather, experts say it is leading to increased financial pressure on banks. As a result, lenders are increasingly seeking refreshed valuations on legacy loans. A hope is that once the country gets past the Presidential election and in combination with the Federal Reserve Bank's continued and expected rate cuts, investors and commercial real estate owners can get back to the business of owning and operating assets. #CRE #lending #valuations Via GlobeSt.com https://hubs.ly/Q02Wvvlv0

We welcome Jeff Colton, MAI to the Partner Valuation Advisors team as EVP. Jeff is a key addition in California as we continue to expand and strengthen our national footprint. He is a multifamily specialist who brings experience throughout the Western U.S., and is based in our Southern California office in Irvine. Jeff has worked with clients that range from developers and investment funds to local banks and large financial institutions, with deal sizes ranging from $1 million to $350 million. Though his primary focus is on Southern California, he has national experience including performing valuations in states such as California, Oregon, Washington, Nevada, Arizona, New Mexico, Colorado and Texas. #CRE #multifamily #valuations Via Connect CRE https://hubs.la/Q02WtPvf0

Could the battle to tame inflation be drawing to a close? The U.S. economy is expected to grow at an annual rate of 2.8% in 2024 and 2.2% in 2025, according to projections by the International Monetary Fund. The IMF points out that the U.S. and other major economies have managed to avoid a recession as they worked to bring inflation under control. #inflation #economy #recession via AP News https://hubs.la/Q02VT5W-0

A strong early response to the Fed's first interest rate cut was reflected in LightBox's most recent CRE Activity Index, which rebounded sharply, rising to 98.2 in September. That's 8.3 points higher than August, and a notable 10.3 points above the 87.9 recorded one year ago, when the dearth of properties listed for sale and the bid-ask gap between buyers and sellers hindered transaction volume. LightBox researchers say the increase was fueled by an uptick in commercial property listings, which typically happens after Labor Day as the market settles into the final months of the year. September's biggest development was the Federal Reserve's first interest rate cut since 2020, which spurred a positive reaction from the CRE lending and investment markets. Manus Clancy, LightBox head of Data Strategy commented, "The 50-bps cut was an unexpected but welcome surprise for CRE, providing a psychological boost. Even a 25-bps cut would have signaled to the market that a new era of capital deployment has finally begun." #CRE #interestrates #federalreserve https://hubs.la/Q02Vl66H0

Not every commercial real estate lender in the U.S. is at risk following the sharp downturn in prices since 2022, according to MSCI Inc. Researchers Fritz Louw and Jim Costello say the timing of loan originations and the type of properties used as collateral are key factors in estimating losses. But they also found that lenders who originated loans late in the cycle, such as debt funds, tended to have larger unrealized losses on the underlying collateral. Their advice for investors monitoring the risk of lender losses, and commercial property investors eager to identify opportunities, should examine the details for each lender rather than rely on generalizations or previous crises. #CRE #lenders #investment https://hubs.la/Q02T-8bz0

A report by Berkadia shows there’s been a flight to quality underway since 2023 as multifamily investors adopt core and core plus strategies. Properties in favor are those that are newer, and include modern amenities, as well as feature energy-efficient designs. Those attributes appeal to both tenants and investors seeking to generate stable and predictable cash flows, and contribute to higher transaction volumes. #CRE #multifamily #investment Via GlobeSt.com https://hubs.la/Q02TtqY50

The latest U.S. jobs report likely relieves some of the pressure on the Federal Reserve heading into November's meeting. It shows the economy is growing, there's a cooling of labor "tension" and the favorable jobs report that beat expectations runs counter to a perception of rising risk, (revisions also showed less job growth than had been feared by some economists). #economy #jobsreport #interestrates Via Reuters https://hubs.la/Q02SHbvj0

CRE Finance Council's (CREFC) latest survey reveals renewed optimism for CRE financing in 2025. The 3Q 2024 Sentiment Index survey of the CREFC Board of Governors held a decidely optimistic perspective -- even before the Fed's interest rate cut was announced. Lisa Pendergast, CREFC executive director, said, "The latest survey results signal a strong resurgence of confidence within the CRE finance industry. Market participants are preparing for growth and opportunity through year-end and into 2025." #CRE #financing Via GlobeSt.com https://hubs.la/Q02RXWZR0