Jesse Kay

The FDIC published their 3Q24 balance sheet today. A few very high-level highlights as it relates to CRE. The percentage of 30 to 89-day delinquent loans continue to trend higher for construction and core CRE, but they dropped sharply for multifamily. That said, the % of non-current loans that rose across the board for construction, core commercial and multifamily. In fact, this measure shows that % of non-current multifamily loans is accelerating higher. This may indicate that more multifamily loans are become seriously delinquent (i.e, 90-days or longer). It's worth emphasizing that these percentages remain well below levels that were observed during the GFC. For instance, in 4Q10, 16% of construction loans were non-current vs 4.3% for core commercial and 3.7% for multifamily.

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The value of distressed assets in the #CRE marketplace continued to grow in the U.S. into Q3'24. Still, the ramp up is not as rapid as that seen following the GFC as there are different forces at play in the current market. Read more about the source of distress and a chart on comparisons to the GFC by my colleague Alexis Maltin here: http://ms.spr.ly/6049WR4GN MSCI Real Assets

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Freddie Mac's latest midyear outlook forecasts muted growth for the multifamily sector in 2024, with high supply and slow rent growth posing challenges. Despite a healthy economy, the vacancy rate is set to rise, and rent growth is expected to be just 2.7%. This tempered performance is a result of record-high new unit supply and economic volatility. However, long-term prospects remain strong due to housing shortages, high for-sale housing costs, and favorable demographics. Secondary and tertiary markets, particularly in the Sun Belt and southern plains, are likely to see more robust growth. https://lnkd.in/dUYcUevi Website: https://londonmoeder.com/ Facebook: https://lnkd.in/d7-qmPKb LinkedIn: https://lnkd.in/dsKSa7am TikTok: https://lnkd.in/dMJuxejJ Youtube: https://lnkd.in/d2rGGnCy #commercialrealestate #commercialproperty #CommercialLand #commerciallandforsale #warehousespace #officespace #flexspace #industrialspace #sandiegocommercialrealestate #sandiegorealestate #realestate #cre #realtor #realestateagent #realestateinvesting #property #commercial #commercialproperty #realestateinvestor #business #investment #propertymanagement #investmentproperty #residentialrealestate #forsale #retail #entrepreneur #construction #officespace #realestatebrokerage #housingshortage #housing #housingelements #housingmarket #housingcrisis #orangecountyrealestate #orangecounty #orangecountyhomes #latimes #lahousing #losangeleshousing #housingresearch

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Commercial real estate seems to be turning a corner globally. There are still storm clouds out there, and holes in the capital stack that need to be patched for some assets. But the rapid decline in deal volume and pricing came to a halt in the second quarter of 2024. MSCI Real Assets #CRE

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As the 2024 Presidential election approaches, will it shake up the commercial real estate market? Our latest findings reveal some surprising insights. Curious to know what really influences deal volumes? Click here to find out: https://lnkd.in/gU_5u3j4 #CRE #CommercialRealEstate #RealEstateInvesting #Election2024 #MarketInsights #InvestmentTrends #PropertyManagement #RealEstateNews #FriedmanRealEstate

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The US office market continues to build momentum after turning a corner in Q2 following five straight quarters of negative net absorption, reports GlobeSt.com on NAIOP's Q4 Office Space Demand Forecast. https://lnkd.in/eQ3KiRQs

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#MarketReport - Our Year End numbers are in. In 2024, the Lake Tahoe real estate market demonstrated remarkable resilience and growth. Despite broader economic uncertainties, rising interest rates and market corrections seen in other regions, Tahoe saw median prices begin to stabilize near the peak levels reached during the pandemic surge. In fact, three micro-regions reached record high prices. See the details graphed, plus our complete analysis and predictions in our 2024 Lake Tahoe Real Estate Market Report. https://lnkd.in/gJgdXbfg

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Appraisers in the U.S. need better tools that allow them to use more judgement in valuing assets. My colleague Willem Vlaming has been developing work showing that in parts of the world with low market liquidity and few comparable sales, that appraisal teams have been better able to capture the decline in asset values. http://ms.spr.ly/6040Yw5ts MSCI Real Assets #CRE

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Andrea Pirrotti-Dranchak (MBA), Expansive's Managing Director, recently sat down with Sarah Maffei (Momberg), Vice President at Foundry Commercial, to discuss the evolution of commercial real estate needs and strategies that are used to ensure both immediate and long-term objectives of businesses are met when considering all of the workspace options available today. "Before COVID commercial real estate was simpler. Typically, you’d calculate your space based on headcount. Now, it’s not about having a desk for every person and enough room for private offices. It’s more about collaborative spaces. Some still want a dedicated desk, but most people come to the office to work together. So, offices are focusing more on shared spaces rather than individual offices, which used to be the norm." Click the link to check out the full article, as well as the full video interview for more insights ➡️ https://hubs.la/Q02yJGNh0 #flexiblework #futureofwork #workplaceinsights

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The assessment of retail tenants by landlords encompasses various factors, from financial stability to industry dynamics. Here are three aspects of @Northmarq's Top 100: Tenant Expansion Trends Report: 1. Consumer preference for bargains amid economic pressures has led shoppers to seek value brands like Dollar General, Target and ALDI USA. 2. Convenience plays a pivotal role in today's retail landscape, exemplified by Wawa, Inc., and Chipotle Mexican Grill, which prioritize efficient service and accessibility through initiatives such as drive-throughs and mobile apps, aligning with evolving consumer preferences. 3. There's a growing emphasis on personal wellness among consumers, creating opportunities for retailers to offer health-centric products and services. Companies like Planet Fitness and Sprouts Farmers Market are strategically positioned to capitalize on this trend by expanding their presence and providing healthier alternatives, reflecting the evolving demands of health-conscious consumers. For additional insight, check out the breakdown on GlobeSt.com: https://lnkd.in/dPUdKj7D

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How are smaller footprints and smaller firms driving the tech sector’s renewed NYC office leasing? Read the story: https://lnkd.in/ggKm4GfT #RealEstate #CommercialRealEstate

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Equity Residential Expands Sun Belt Portfolio with $1 Billion Acquisition from Blackstone Equity Residential has taken a significant step forward in its Sun Belt expansion strategy, agreeing to purchase an 11-property apartment portfolio from Blackstone for nearly $1 billion. This acquisition, which includes 3,572 units across Atlanta, Dallas, and Denver, reflects Equity’s confidence in the long-term growth potential of these rapidly developing markets. Although current rent levels in these regions are weak, Equity’s leadership sees this as a strategic investment with a promising outlook for rental rate recovery by 2027. As the commercial real estate market shows signs of stabilization, this deal underscores the growing institutional demand for high-quality assets in the Sun Belt. Read full article here: https://lnkd.in/gTwsSnVa How do you see the future of multifamily investments in the Sun Belt evolving over the next few years? #costar #sunbelt #equity #blackstone

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Let's talk about compensation structures in CRE. They can be tricky to get right, but understanding which bonus model works best for your team is key. Here are 4 common structures and when they work best. 1. Discretionary Bonus This is the go-to structure at most large CRE firms. You set a target bonus range, but the actual payout depends on both personal and company performance. - Usually ranges from 20% - 100%, depending on the role. - Acquisition roles often get 50-100%, while support roles see 20-30%. - Sets clear expectations but also gives flexibility during tough times. I like this model because it balances expectations with financial stability. 2. Target Bonus + Multiplier on Performance This one’s popular in asset management. You set a target bonus, and then adjust it with a multiplier based on hitting certain metrics (like NOI vs. Budget). For example: - 90% of target if NOI is within 90% of budget. - 100% of target if NOI is within 95%. - 110% of target if NOI exceeds budget. Great for asset management, if the KPIs are crystal clear. Not ideal for every role, though. 3. Bonus for Large Capital Events You’ll often see this in smaller firms, especially for acquisitions or capital markets roles. - Bonus is tied to specific events: deal closings, fundraises, etc. - Typically adds up to bonuses equal to 100% of base salary. - Useful for firms with cash constraints—bonuses happen when cash is actually available. This structure grows with your team, but you’ve got to be careful with compliance, especially in fundraising. 4. Percentage of Promote This one’s more common for execs in smaller firms. Often, promote participation vests over time or is tied to continued employment. - Usually 1-3% of promote per exec. - Rule of thumb: No more than 10% of promote should go to the team. - Great for young companies without much cash, but tough to scale once you’re past 20 employees. This model can also get emotionally charged because the stakes are high, handle with care. At the end of the day, compensation models in commercial real estate are about aligning incentives with company goals and keeping your team happy. Knowing when to use each model can make all the difference in retaining talent and scaling effectively. Which of these models have worked best for your team? I’d love to hear your thoughts!

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A recent report from BuildingDesign Media, looking ahead to the second half of the year, shows the strength of the #multifamily sector despite some economic challenges. Among the key themes are: --Demand remains steady, but rising supply and financing issues are creating headwinds. --Growth is expected to slow in the coming months, but there will be regional variations based on economic conditions and supply factors. --The economy remains stable and job growth persists, but softening rent growth and occupancy rates are emerging. --And, of course, the industry is continuing to track inflation (which is now down to 3.3%) and interest rates. https://lnkd.in/g32By27V #multifamilydevelopment #multifamilyinvestment #apartments #apartmentliving

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📊 Key Multifamily Market Trends for 2024: Demand Dynamics Unveiled Get exclusive insights from Daniel Katz, CEO & Co-Founder of Magnify Equity, as he dives into the demand trends shaping the multifamily market in 2024—and what it means for your investments. 🚀 Key Takeaways: ✔️ Emerging market trends driving demand ✔️ Adapting to dynamic market shifts ✔️ Preparing your portfolio for long-term growth Stay ahead in the ever-evolving real estate landscape. 🎥 Watch the full video here: https://lnkd.in/dUevastE 🌐 Explore more insights at magnifyequity.com #MultifamilyTrends #RealEstateInvesting #MagnifyEquity #2024RealEstate #DemandDynamics

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