12.12.2022 - 12.16.2022

Your weekly collection of third-party reports, blogs, articles, and podcast covering the topics affecting the multifamily industry today.

Multifamily Industry News

Globe Street: It’s Been a Bad Year but REITs Could See a Strong 2023: A bad 2022 for REITs could turn into a great 2023, but that if depends on some important factors turning around, says Hazelview Investments’ 2023 Global Public Real Estate Outlook Report. Current significant discounts, with the right tailwinds next year, could “offer significant positive mean reversion.”. (Click here to read the full article)

NCREIF: Significant Write-Downs Lead to Negative Appreciation For NPI: The quarterly total return was 0.57% for the third quarter which is down from 3.24% the second quarter. The quarterly return consisted of 0.93% from income and -0.37% from appreciation – the first negative appreciation return since the 2nd quarter of 2020. Appreciation is after the deduction of capital expenditures. (Click here to access the full report)

Rent Café: The Most Competitive Rental Markets of 2022: With around 44 million American households living in rental homes, renting is at its highest level in half a century. But, for some renters, finding a new place to call home was no easy task in 2022 — especially in the highly coveted South Florida area, which has long been a favorite relocation spot for people from all around the country. (Click here to read the full article)

RealPage: Over a Quarter of Student Beds Already Pre-Leased for Fall 2023: Only three months into the student housing pre-lease season and occupancy rates are already setting records. Over 27% of student housing beds at the core 175 universities tracked by RealPage Market Analytics were pre-leased for the Fall 2023 academic year – easily the highest November rate on record. (Click here to read the full blog)

Costar: Costs Up 10% for Multifamily Borrowers Facing High Interest Rates: More upfront cash needed to get deals done, according to Fannie Mae and Freddie Mac data. The Federal Reserve’s fight to tame historically high inflation is proving costly to multifamily real estate borrowers who are weathering rising interest rates and need more upfront cash to get a deal done. (Click here to access the full report)

Bisnow: There’s A Broker Playbook for How to Survive A Recession. Will It Work This Time?: Previous recessions, like the dot-com bubble burst and the Global Financial Crisis, were confined to one sector or the result of a macroeconomic cycle crashing. This time, said Selvey, one of the top office leasing brokers in Atlanta, brokers are reckoning with a seismic shift driven by behavior, rather than purely economics. (Click here to access the full article)

Multifamily Dive: Multifamily Servicing Rates Continue to Increase: The commercial-backed mortgage securities special servicing rates for apartments rose 69 basis points to 2.33% in November, according to a new report from Trepp. Multifamily’s 60 basis point increase was the largest jump in the commercial real estate sector.  (Click here to read the full article)

Multifamily Dive: Blackstone Says It Won’t Force Asset Sales from Breit: News that New York City–based Blackstone was limiting withdrawals from its $69 billion Blackstone Real Estate Income Trust, also known as BREIT, flooded the financial press last week and led many multifamily executives and analysts to wonder if some of the apartment units that the private REIT collected over the past couple of years might come back on the market. (Click here to read the full article)

NAR: Here Are the Top Markets to Watch Where Renters Are Becoming Homebuyers: Atlanta is the market where renters across the country stand the greatest chance of becoming homeowners next year, according to an analysis by one of the largest U.S. real estate organizations that weighed variables including housing supply, affordability and population growth. (Click here to read the full report)

Macro-Economic News

WSJ: Fed Raises Rate by 0.5 Percentage Point, Signals More Increases Likely: The Federal Reserve approved an interest-rate increase of 0.5 percentage point and signaled plans to lift rates through the spring, though likely in smaller increments, to combat high inflation. (Click here to read the full article)

Wells Fargo: 2023 Outlook: Recession, Recovery, And Rebound: We expect the U.S. and global economies to face a moderate recession through the summer in 2023 followed by a second-half recovery capable of extending into 2024. Our view is that inflation’s noticeable decline will be the other dominant theme in 2023, shaping the trajectory of economic growth and interest rates. (Click here to access the full report)

BofA: Economic and Market Outlook for 2023: U.S. Rates stay elevated but expect a decline by year end 2023. The yield curve is expected to dis-invert and rates volatility should fall.  Both two-year and ten-year U.S. Treasuries should end 2023 at 3.25%. Sectors hurt by rising rates in 2022 may benefit in 2023. With inflation, the U.S. Dollar and Fed hawkishness peaking in the first half of 2023, markets are expected to tolerate more risk later in the year. (Click here to access the full outlook)