Matthew Neisser

NAHB predicts a significant pullback in multifamily starts for 2024. Are we surprised? Multifamily Developer Confidence is in Negative Territory. In the fourth quarter of 2023, multifamily developer confidence remained in negative territory, as revealed by the Multifamily Market Survey (MMS) conducted by the National Association of Home Builders (NAHB). The survey produces two key indices: the Multifamily Production Index (MPI) and the Multifamily Occupancy Index (MOI). The MPI, which gauges sentiment about current production conditions in the apartment and condo market, scored 41, below the break-even point of 50. Meanwhile, the MOI, measuring the industry’s perception of occupancies in existing apartments, registered 77. Tight lending standards and high development loan costs continue to hinder financing for new multifamily projects. Given the substantial supply of multifamily units under construction, NAHB predicts a significant pullback in multifamily starts for 2024 #realestatedevelopment #realestateinvesting #passiveincome #multifamily #realestate #multifamilyinvesting #multifamilyrealestate #firsttimedeveloper #raisemasters30 #cre #financialfreedom

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So how many of you/us Real Estate Developer types can continue doing business after a $1B default much a $1M default. This is the classic double standard, different strokes for different folks. https://lnkd.in/gTrfGPyn

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We have to have that parcel next door! Our relationship with Aby Rosen and Michael Fuchs, the principals at RFR Holding LLC, goes back to when they started their company in 1991. After that land sales market fell asleep during the Savings & Loan Crisis in the early 90s, we did the first development site sale coming out of that period, selling the site at 406-408 East 79th Street to RFR for $40 per buildable square foot. RFR was also our landlord for the first substantial office space Massey Knakal ever had – we moved into RFR’s 400 Park Avenue in 1993 when the office market was challenged enough that we could afford to take space there. We went on to take space at RFR’s 18 East 41st Street and occupied two different spaces there before moving to RFR’s 275 Madison Avenue where we stayed until MK was sold in 2014. In addition to being our landlord for all of those years, we also did several transactions with RFR as they have always been active players in the NYC investment sales market. One of their assets was a one-story retail property at 451 Lexington Avenue, at the southeast corner of Lexington and 45th Street. The property had 75’ of frontage on Lexington and 70’ of frontage on 45th Street. Most properties on wide avenues in Manhattan have 100’ of depth off the avenue. This short lot would create massing and design issues for a developer even though the property was in a high-density 10 FAR zoning district. The solution, try to include the 30’ wide adjacent parcel to the south at 447–449 Lexington. That was a 2-story, 30’ wide retail property, also with just 70’ of depth. Individually, each site would be challenging to develop but together, they make a great 75’ x 100’ dream site in midtown Manhattan adjacent to Grand Central Terminal. The adjacent property was owned by Edward Friedman, a broker and investor who cut his teeth in the business working with icons Harry Helmsley and Irving Schwartz. Eddie, at first, wasn’t interested in selling, but after explaining that the whole was worth much more than the sum of the parts, he got on board. Both properties were put on the market and we sold the site to a hotel developer for a combined $41,200,000. Here is what Aby Rosen had to say about the transaction: “Our relationship with Bob Knakal is decades long and we have worked on many transactions successfully in the past. Bob and his team did an outstanding job for us on the sale of this site. Bob is our ‘go- to’ broker for land sales in New York City.” #tuesdaytestimonial #nycrealestate #developmentdeal

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According to Yardi’s newly developed software tool, the Conversion Feasibility Index, which measures the suitability of office-to-residential conversions, Denver alone has over 1.4 million square feet classified as “Tier 1” - meaning they’re top conversion candidates. https://lnkd.in/eGdcWbaw A few standout insights from the report: - More than 1.2 billion square feet of office space nationwide is viable for conversion. Top metros have over 20% of their stock as potential candidates. - Office prices continue to plummet , with some properties being sold at up to 90% less than previous prices. - More cities are starting to actively encouraging conversions through tax breaks and accelerated zoning processes, with New York and D.C. leading the way. Interested in learning more or taking advantage of this generational opportunity? Click the link below to see a live opportunity: https://lnkd.in/eJJ2rjBr

95% of CRE Brokers Do Not Understand Leverage... Almost all of them think they do, but in my opinion - most are missing out on the most important type of Leverage. "But I work with Bankers every day and there's debt on almost every deal I do!?" This is not the type of Leverage I'm talking about. There's 4 types of Leverage that can be broken down into 4 C's: Capital, Code, Content, and Collaboration. The Collaboration part has probably been the number 1 growth factor for my business. Collaboration allows Leverage on your Time. In my opinion, the key to the "game" of business is to continually trade up for more Leverage on Your Time. At first, you have to do the $10/hr tasks. But once you're making $50/hr, you can hire someone for $10/hr. And then when you're making $200/hr, you can hire someone for $50/hr to do the tasks you shouldn't be doing. After that, you continue to gain more leverage on your time, and execute the tasks that are the most influential to your business, and that you genuinely enjoy doing. So, if you're a CRE Broker and are not using Leverage in your business... I would recommend you start thinking about it. And if you want to know how I structured this Leverage to scale to $1.4M in Gross Commissions in a Single Year - Just reply to this post or DM me. No sales pitch - just happy to help however I can.

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🚨 CMBS Alert: Office Delinquencies Double in Just One Year! 🚨 -Moody's 📉 CMBS Delinquency Rates on the Rise 📉 The latest CMBS Troubled Loan Tracker reveals troubling trends across the commercial real estate (CRE) landscape. From office distress to rising multifamily defaults, the numbers paint a clear picture of market strain. 📊 November 2024 Snapshot: Key Metrics at a Glance Conduit & Fusion CMBS Loans 🔺 Delinquency Rate: Up 2.4% YoY to 7.4% Office Loans: Surged to 11.2%, more than doubling from 5.3% last year. Highlight: A $350M loan for 225 Bush in San Francisco (44% occupancy) drove much of this increase. Multifamily Loans: Jumped to 3.5%, from 1.9% in Q2. Key driver: A $200M loan for 180 Water Street in NYC failed to mature. Hotel Loans: Climbed to 6.0%, with major contributions from Midwest Marriott properties. Large-Loan, Single-Asset, Single-Borrower (LLSASB) Loans 🔺 Delinquency Rate: Increased to 7.0%, up from 4.76% last year. Hotel Sector: Biggest jump at 8.78% (+243 bps). Office Sector: Now at 10.7%, up 147 bps. Special Servicing Trends Conduit Loans in Special Servicing: 9.9%, up 18 bps from October, led by office loans like 225 Bush and 5 Penn Plaza. LLSASB Special Servicing: Rose sharply to 8.75%, with office loans nearing 15%. 💡 What’s Driving the Numbers? Maturity Defaults: Now 45.3% of conduit CMBS delinquencies—up dramatically from just 11% in 2018. Extension Relief: Many loans are leaving delinquency status due to extensions, not payoffs, highlighting ongoing credit stress. Credit Access Concerns: High delinquency volumes and tighter refinancing conditions spell continued pressure on the CRE market. 🚨 What’s Next? Expect office distress to dominate, but watch for further multifamily cracks as valuations slip. Industrial remains a bright spot with minimal defaults. 🤔 What do you think these trends mean for the broader CRE market? Let’s discuss! 📌 Follow me for ongoing updates and actionable insights into CMBS, distressed debt, and CRE trends. https://lnkd.in/g-qR_-zE

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Today's lessons were on the 5 Rules of the Visionary/Integrator relationship. I've shared those in the screenshot here, but I really enjoyed the model shared for Issues Solving. Wickman named the model, "Issues Solving Track." There are 3 steps to the model: 1) Identify, 2) Discuss, and 3) Solve. Rarely is the issue brought to the table the real problem. In the identify step, the group will work hard to settle on what the real issue is and name it. The goal is to name the issue in one concise sentence. Next, all thoughts need to be shared. No thought should be discussed more than once. Wickman calls that politicking. The goal is the share all thoughts, but not be redundant. Third, we solve the problem. It's less important "what" you decide than it is that you all make a decision on next steps. A consensus is great, but the Integrator is the tie breaker. Once the decision is made, everyone should team back up and get on the same page. This seems simple, and is, but most leadership teams struggle to execute on solving their problems. Can you use the model above to solve problems more effectively in your company? Who do you have that can be a good moderator of such a meeting? Who is your tie breaker? I'm reading, "Rocket Fuel."

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The level of commercial/multifamily mortgage debt outstanding increased by $47.7 billion (1.0%) in the third quarter of 2024, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report. Total commercial/multifamily mortgage debt outstanding rose to $4.75 trillion at the end of Q3. Multifamily mortgage debt alone increased $29.8 billion to $2.12 trillion, up 1.4% from Q2. Jamie Woodwell #cre #finance

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The FHFA announced this past month that “it will raise the 2025 multifamily loan caps for purchases by the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac to $73 billion each.” What this represents is“$146 billion in multifamily market support for next year, an increase of more than 4% from 2024 levels.” A boost that could pay some serious dividends for the multifamily market come next year. We’ll have to see. #Housing #Multifamily

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While at first glance, Dennis Schaal's Skift article paints a really exciting chart for Short Term Rentals (#STR). But I think the data would tell an even more impressive story when cut by professional managers. While there is still discussion on what "professional" means, even a short list filter will present a telling story. Currently this graph compares Professional Hotels with Professional/Amateur/Opportunists/Fakelistings STRs. From what I have seen review data paint a very telling difference based on professional vs homeowner and portfolio size. Always exciting to see STRs compared more to hotels, and maybe that is bait for more hotel companies to enter the space. Who wants to make a bet as to first hotel to brand their own STR Property Management brand? Looking to scale and set your STR business apart or are a travel company looking to learn more about the space, we can help at RabCap. Just shoot me a note! https://lnkd.in/gKWX_P5R

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Fascinating insight from Mike DelPrete, in his words: - The amount of homes listed for sale and then delisted – taken off the market without selling – is rocketing to all-time highs. - This is the start of a price correction; sellers are bringing more inventory to market, but with “aspirational pricing” that buyers are not willing to pay.  - The record number of pricing corrective measures will likely lead to an overall correction – lower prices – as supply and demand continues to rebalance. https://lnkd.in/exaxCjjx #realestate

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Freddie Mac: Housing market is undersupplied by 3.7 million homes and it's "the root cause of decreased housing affordability" Housing shortage, according to Freddie Mac economists 👇 2018 -> 2.5 million 2020 -> 3.8 million 2024 -> 3.7 million According to a report published last week by Freddie Mac economists... The U.S. housing stock (147.0 million units) is 3.7 million units below the group’s estimate for how many housing units the market needs given demographics (150.7 million units) “The root cause of decreased housing affordability is the fact that housing supply has not increased enough to match demand. Inadequate housing supply leads homeowners and renters to bid up the sale price and rent of available housing, which puts a squeeze on affordability,” wrote Freddie Mac economists in their report. To stay updated on the U.S. housing market—including regional market variations, buyer/seller dynamics, and different perspectives—subscribe to the ResiClub newsletter: https://lnkd.in/gc6XNqfW

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Real Estate post NARS settlement with Keith Robinson, Chief Strategic Officer of NextHome, Inc.. We dive into the 2024 real estate market and explore the impact of the National Association of Realtors (NAR) settlement on home sales. Keith shares insights on market trends, challenges, and what the settlement means for buyers, sellers, and real estate professionals. Don't miss this in-depth discussion on what lies ahead for the housing market! https://lnkd.in/emrmVmhD

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The table below shows a few soft agency financing quotes that we received today Seven Karat Strategy Advisors. This is for a multifamily acquisition loan for a newer vintage property in a tertiary market. The takeaway is that the 5-7 year fixed rates are now in the high 4's in comparison to them being in the low to mid 5's prior to the Fed's 50bps decrease in rates.

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Here's 1 reason why most CRE Brokers will never hit $1M in Gross Commissions.... To be where you've never been, you must do what you've never done. I'm not telling you to get crazy complex in your strategy or pivot directions. In most circumstances, it's simply doing more of what you're already doing. However, most of the time - brokers are already working at least 45-55 hour weeks, they don't want to sacrifice family time, and I totally get that. So how do you scale? When I was stuck around $600k and wanted to hit $1M in GCI, I had to become a CRE scientist. What I mean by this is that I constantly had to experiment on what was going to get me to the next level. New Technology, a New Hire, Outsourcing Marketing, etc. I had to test probably 5-6 different things (and only 2-3 of them ended up working) in order to go to the next level. The reason why most brokers will never get to that "next level" is because they don't overcome the fear or uncertainty of failure. I probably invested $150k over 18 months in these "experiments". It also helped that I didn't scale my expenses after I initially scaled my income to $500k. I had the freedom & flexibility with my finances, but also the relentless spirit to bet on myself. And also, it's a lot of fun doing what you've never done. You learn more about yourself than you ever would by playing it safe. So it might not be for everybody, but it certainly helped me. DM me if you have any questions - or check the link under my name and register for our next event. 

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Navigating Foreclosures: A Strategic Approach for Aspiring Property Moguls Elevate your investment portfolio by mastering the art of acquiring foreclosed apartments. Are you ready for the challenge? 🏢💡 #MultifamilyInvesting https://bit.ly/3UZnqWi

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"That doesn't sound right." ^A sixth sense BS detector that anyone who is in charge of finance or allocating capital for a company should have when evaluating investment underwriting, looking at dashboard report from a software tool, reviewing historic financials, doing a spreadsheet analysis, etc. How you develop this sense: being in the day to day of a business & building the rules of thumb that govern any business or industry. Looking at lots of deals, doing deals, & refining your underwriting assumptions and business plan over time.

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