Cope Willis

With concerns about climate change, investor responses, and regulation of how commercial real estate properties handle carbon emissions, JLL suggests the CRE industry take building performance standards, or BPS, seriously. https://lnkd.in/gSqRuJYG #ccim #ccimwa #climatechange #investors #regulations #commercialrealestate #carbonemissions #BPS #JLL

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The latest NAIOP Office Space Demand Forecast projects that net demand for office space will shrink by 11.8 million square feet over the last three quarters of 2024 and will contract an additional 4.5 million square feet in 2025. Tenants have had several quarters to adapt to hybrid schedules and adjust their use of space accordingly. The forecast's authors expect that economic factors will increasingly drive leasing decisions going forward. However, persistent inflation, high interest rates and the continued possibility of a recession suggest the office market is not likely to rebound this year. #office #cre https://lnkd.in/eBzNVQHf

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"Pop quiz: What do inflation, climate change and zoning laws have in common? Answer: They’re all reasons that rental housing costs are pretty high these days, according to a Harvard University report." This is the opening to the attached article below. I've also linked to the Harvard Study on the state of the nation's housing that it references. The article and report serve to cooperate what I have been saying in prior posts. Housing starts are down in multi-family (Single Family as well, just as an FYI) and the product which is getting built is expensive. However, increased building and operations costs make it unfeasible to build anything else. The result is that NOAH (Naturally Occurring Affordable Housing) housing is disappearing and rent pressures will soon return across the board. Let's look at the math really quick from an investor's perspective. I can buy apartment A at $150,000 per door, with a 15% IRR and 8% Cash on Cash return, plus take advantage of future rent increases. Or I can try and build a similar apartment for $300,000 per door down the street, spend 24 months carrying the debt on it while fighting with the neighbors who don't want more apartments and the city that won't support me, whose rents are still capped by the market and hope to break even in year 5. Providing I can even find the contractors to build it for me. It get's even better if they are trying to build affordable housing. As we discussed on the NIMBY/YIMBY posts, the zoning/permitting fights to prevent "those people" from living nearby are epic. Plus now, on top of fighting the local municipality, they have to build according to the rules of the housing authority (on top of local rules) and have restrictions on rents. That's providing they get the tax credits in the first place because they are competitive, and developers often spend $100,000 plus and never even get an award. In order to apply for a tax credit award they have to have site control (buy or contract to buy the land), have proof of zoning, have initial architectural drawings, and pay application fees. These are the reasons that, as a broker, I'm not overly worried about my sector of commercial real estate. However, as an avid believer in affordable housing, I am terrified. https://lnkd.in/erWFEJHX https://lnkd.in/e9xgpuCc

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Sustainability considerations continue to evolve in how they are impacting investor transactions. With 84% of surveyed investors confirming a biodiversity strategy in place or future plans for one, this could influence investor decision making going forward. Read more in JLL's latest investor survey and Podcast featuring Janey Douglas and Kimberly Markiewicz. https://lnkd.in/gckzbxnz Janey Douglas, Ariya Capone, Kimberly Markiewicz, Cameron Ramsey #ESG #InvestorSurvey #Sustainability #RealEstateInvestment #NetZeroCarbon #CapitalMarkets

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As interest rates remain elevated, the CRE landscape is shifting. Buyers and sellers are now facing the reality of higher rates for longer, which will drive more transactions and necessitate creative financing solutions. Our very own, Thomas Grzebinski II outlines strategies to adapt, emphasizing flexibility and innovation in this featured article by Commercial Property Executive. Read more on how the market is evolving and how to stay ahead: https://lnkd.in/gMKpqgfJ #CRE #RealEstate #Finance #MarketTrends #Gantry #CommercialRealEstate #marketinsights #thoughtleadership #marketupdates

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