GSE multifamily-financing activity dips
The government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac bankrolled a lesser volume of multifamily loans in the first half of this year compared to
the same six months in 2017. The GSEs purchased a total of $54.4 billion in multifamily
mortgages in the January-June period, the agencies reported this past August. This
was down 5 percent from the volume in the first half of 2017, and driven by lesser
Fannie Mae activity. For the full year of 2017, the GSEs purchased $140.2 billion in mortgage debt in the multifamily sector.
Fitch: CMBS loan defaults should decline despite risks
The delinquency rate for loans underpinning commercial mortgage-backed securities
(CMBS) should stay low to close out 2018, despite looming risks from higher interest
rates and struggling retail assets, Fitch Ratings reported this past August. In June of
this year, the CMBS delinquency rate stood at 2.72 percent, which was down 49 basis
points year over year and down from 9 percent at the peak of delinquencies in July
2011. Fitch cited the solid performance of loans originated after 2011 and the low
numbers of maturing loans as factors in keeping delinquencies down.
Commercial-property sales volume picks up in 2018
Deals involving significant commercial assets picked up through the midway point
of 2018 on a surge in industrial-property sales and a rebounding Manhattan office
market, Real Capital Analytics (RCA) reported. Overall sales-transaction volume for
properties valued at $2.5 million or more clocked in at $118.8 billion in the past second
quarter, which was up 2 percent compared to the same quarter in 2017 and was the
second consecutive quarter with a sales-volume gain, RCA reported. Industrial-property
sales totaled $18.2 billion in the second quarter of 2018, up 17 percent year over year
and a record for the second quarter, according to RCA data.
Demand for small commercial buildings declines
Demand for space in smaller commercial properties fell significantly in the second
quarter of 2018, the one troubling warning signal in an otherwise booming market for
office, industrial and retail properties, according to the tracking company Boxwood
Means. Companies absorbed a net 17. 9 million square feet in core commercial
properties in the past second quarter, which was the lowest gain in space absorption
involving buildings under 50,000 square feet in 24 consecutive quarters, Boxwood
Means reported. Net absorption through the first six months of this year, at 37. 4 million
square feet, represented the weakest first-half total since 2011, when the small-cap
market really began to recover from the Great Recession.
Homeownership’s cost edge over renting is slipping
According to Trulia, it made more financial sense to rent than buy in the nation’s two
most expensive markets, both in California — San Jose and San Francisco. In those two
metros as of this past July, renting was 12 percent and 6 percent cheaper than owning
a home, respectively, Trulia reported. San Francisco and San Jose are outliers, however.
Trulia estimated that on a nationwide basis, buying a home was 26 percent cheaper
than renting as of this past July. That represented the narrowest gap in the cost
advantage of buying in five years. n
Continued >>
In Brief
News Roundup
By Victor Whitman
$24.4B
The outstanding balance of CMBS loans
as of this past June that were being
closely monitored for future losses,
up by $204 million from May
Source: Morningstar Credit Ratings
303K
The annualized pace of multifamily-housing
starts as of this past July, down 9. 6 percent
year over year
Source: U. S. Census Bureau
The forecasted average daily rate for
U. S. hotel rooms in 2018, up 2.6 percent
compared to 2017
Source: STR and Tourism Economists
$129.85
In Numbers
