Property Types To Invest In This Year

Self-Storage

There are many reasons why investing in self-storage facilities tops the list this year. Let’s take a look at a few. The self-storage sector has generated more than $22 billion in annual U.S. revenues. In a society of over-spenders, people need more space to store various items for various reasons. The recent recession caused many families to have to downsize. Naturally, they wanted to be able to keep most of their stuff. Storing the items in a self-storage facility is a great option for people downsizing. We become attached to our stuff.

Self-storage facilities see more of a stable cash flow. Turnover is not a huge issue, as one would expect. Being that there are so many spaces available for rent, owners are less susceptible to big dips in vacancy rates. They are also very low-maintenance. One sweep and the spaces are ready for the next renter.

A few more things to consider when looking into investing into self-storage facilities are better CAP rates, fewer tenant problems, lower maintenance, minimal utilities, and lower expenses.   

Neighborhood Shopping Centers

The neighborhood shopping center is one of the best investments right now. Shopping centers often have “credit” tenants because they have bond rated credit or have multiple locations, which usually results in more successful tenants and security of the centers income. The centers are also multi-tenant, which diversifies the income and most tenant leases have annual rent increases.

According to the recent ICSC report, the U.S. shopping center industry is meeting year-over-year growth in occupancy rates, rents and net operating income. By the end of Q4 in 2014, shopping center occupancy rates were 92.7 percent, the highest level since 2008.

In today’s world where everything can be purchased online, one thing we can rely on is the fact that people still want to go to the grocery store and pick out their own food. This is one reason that grocery-anchored shopping centers continue to be a reliable investment.

 

Seniors Housing

This type of housing growing exponentially every year and there is a guaranteed demand. According to the U.S. Census Bureau, seniors will represent 20 percent of the U.S. population by 2030. More than 500,000 people are expected to be age 65 and older each year, which could fuel the senior housing sector. And, there are options for investors looking into this sector of real estate. Senior housing is divided into four different types: independent living complexes, assisted living communities, skilled nursing facilities and continuing care retirement communities.

Independent living complexes are much like any other multi-tenant apartment complex except that they are marketed solely to people in their golden years. Independent living centers make up the second smallest percentage of the senior market with about 10 percent of the share. The average monthly cost of independent living ranges from about $1,500 to $3,500.

The largest share of the market goes to assisted living facilities. These types of facilities offer more services than independent living such as: laundry, food service, arranged activities, medical services, if needed, and on site drivers. These types of communities still offer a home-like feel and less institutional. The cost for a room in an assisted living facility is around $4,000 per month.

Skilled nursing facilities are also referred to as nursing homes. They provide around-the-clock care for seniors who need in-depth medical attention. The average cost for a private room at a nursing facility is $6,000 a month. Experts warn investors that unless they have a background in healthcare, it may not be wise to take their first foray into senior living investing in this type of complete care environment.

Continuing care retirement communities offer a mix of service levels including independent, assisted living and nursing home care all on one site.

 

Student Housing

In recent years, student housing has had the ability to drive returns. The occupancy figures outperformed traditional multi-family apartments during the Great Recession. With more than 20 million students enrolled in a college or university in the United States, the projected growth by 2022 is expected to be around 24 million. Not to mention, we are seeing record numbers of international students coming to the U.S. to obtain their bachelors’ and advanced degrees. These factors, combined with funding strains for some institutions to have their on-campus housing, this has created a need for more off-campus properties.

Prices for student housing properties are now comparable to the prices investors pay for apartment properties. And, although the properties that are within walking distance to the campuses are more valuable, the demand is still strong for the properties located a bus ride away from the school. We’re seeing cap rates as low as 5.5 percent for properties within walking distance of tier-one universities, and as low as 7.5 percent for properties a shuttle bus ride away from tier-two or tier-three schools.

Suburban Office

The office sector is predicted to perform well in 2016. Suburban office properties saw no growth for many years, while office buildings went through significant price increases. However, that trend is now reversing.  

6 OF THE HEALTHIEST BUILDINGS IN THE WORLD

In the world today people all around are changing their lives to become healthier human beings. But, that is not all that is catching in this the health crazed world. Yes, buildings can be healthy too! These six buildings are all pushing the green envelope and participating in programs such as LEED and WELL to do so. First, let me tell you a little about each of these programs. LEED, which stands for Leadership in Energy and Environmental Design is a green building certification program that is very popular and used around the world. Another program that was launched to bring health and wellness into the indoor environment is WELL. Let’s take a look at six of the healthiest buildings in the world.

1.     The Crystal in London

Owned and operated by Siemens, The Crystal is a sustainable development. The building uses solar power and ground source heat pumps to generate its own energy. This building is the first to achieve the highest sustainable building accolades from two of the world’s leading accreditation programs, LEED and BREEAM. It is actually the most sustainable building in London.

2.     181 Fremont in San Francisco

181 Fremont is a 56-floor skyscraper in San Francisco, California. Once the building is omple, it will be the tallest mixed-use building in San Francisco. The building features a water reusing program that catches and reuses graywater and rainwater. It also has a glass curtain wall system that maximizes natural light. The tower will have the world’s first evacuation elevators. In an emergency, people will be instructed by signage to use the elevators and not the stairs. This is one building I would feel safe living in.

3.     Apple Park in Cupertino, California

Apple Park is the vision of the late Steve Jobs. His idea was to create a space for creativity and collaboration for the Apple team members. Apple Park sprawls out over 175 acres. The main building is a 2.8 million-square-foot building made entirely of panels of curved glass forming a ring shape. There will be a 1,000-seat theater, named after Mr. Jobs himself. The parklands has two miles of walking and running paths for employees, an orchard, meadow and pond within the ring’s interior grounds. The building itself is powered by 100 percent renewable energy. With 17 megawatts of rooftop solar, Apple Park is one of the largest on-site solar energy installations in the world. The building is also the world’s largest naturally ventilated building, requiring no heat or air conditioning for nine months out of the year.

4.     ShanghaiTower in Shanghai, China

This “Twisting Tower” is a 128-story megatall skyscraper in Shanghai, China. It is the tallest building in China and one of the most sustainable buildings in the world. One of the super cool features of the buiding is the double-skin façade technology that improves air quality while reducing the number of vertical trips each building occupant must make. There is also a parapet the collects rainwater which is used to heat and cool the tower. The building’s twisting form allows it to withstand typhoon-force winds which saved an estimated $58M in structural costs during construction.

5.     Southwestern Energy in Spring, Texas

This 550,000 square foot building was built to LEED Gold specifications. A generator powered by natural gas provides 24-hour power for the data center, and overall the building uses 25 to 30 percent less energy than a standard building of its size. The building features a rainwater harvesting system, a high-performance unitized curtain wall system, shading fins and energy efficient HVAC system. Every detail is sustainable, down to the farm-to-table café and their natural gas fueling station.

6.     Medibank Place in Melbourne, Australia

Medibank is Australia’s largest health insurer and in 2015 they opened their new headquarters after listening to what employees had to say about healthy work environments. This is what they took from all that they heard. Some features of their new space includes a sports court, edible gardens, demonstration kitchens all with a vibrant color scheme. The 495,000 square foot building has about 2,300 plants living inside and about 10% of the walls are covered with plants. There are 26 different work settings in the 24-story building. This is one of the many buildings I would want to see!

Why Millennials Love to Rent

Why DO Millennials love to rent? We’re going to take a look at the top four reasons below. . Millennials now fall between the ages of 20 to 35, just about the time people would start buying homes. But, they aren’t doing that as much as they’re renting. Millennials are either about to or have already begun starting a family, and some have just hit the prime rental age.

Yardi Matrix Report issued its economic outlook report for the year and reported that the number of Millennials expected to hit the prime renting ages of 20 to 34 will exceed 2 million this year. Think that’s a lot?! That’s nothing in comparison to the 70 million expected to peak in 2024. What does that tell us? That the multifamily sector can expect a good solid demand from Millennials for at least the next seven years.

Let us not forget to mention that there is an expected unemployment rate from Millennials of more than 8% and $1 trillion in student loan debt. Both of these factors are reasons why the Millennials are renting instead of buying homes. However, these are not the only reasons Millennials see a need or have a want to rent. Let’s take a look at some of the reasons below.

1.              Community

Millennials love supporting their local communities and the fact that they can walk right down the street from their house or apartment and frequent their favorite coffee shop or boutique. They love knowing their money is going to a locally-owned business rather than some of these greedy corporations.

In a recent Edelman Digital Study we found out that a whopping 40 percent of Millennial participants prefer to shop locally, even knowing that they will have to pay more for their goods. Millennials want their money to stay close to home, exactly like the places they shop at. Close to home.

2.              Flexibility

Renting leaves an open window of escape from that noisy neighbor, when buying could get you stuck there living next to that annoying neighbor for 30 years or until that long mortgage is paid off.

Millennials are more apt to change jobs at least three times more than their older counterparts and they actually only stay with the same employer for a max of three years on average, according to the US Bureau of Labor Statistics. Renting provides much more flexibility to them when it’s time to move cross-country to their new job. Actually, it is so common that a lot of apartment complexes now have a special clause in the lease for early termination due to job transfers more than 50 miles away.

3.              Convenience

This is a huge reason for Millennials choosing to rent over home buying. Have you ever had a large appliance break like a fridge or a stove? Your refrigerator just went kaput and what do you do? If you’re a Millennial, easy! You call your landlord who sends someone out to look at it and upon inspection decides you need a new fridge. That is convenience. You didn’t have to call the handyman or shell out money to buy a new fridge. What about landscaping? That is usually covered by the landlord. If you own your own home, that is definitely another responsibility of the homeowner. For Millennials busy lifestyles, it makes more sense to have fewer items of home maintenance on their to-do list and also on their budget.

4.              Amenities

This is an obvious no-brainer if you ask me! Let’s think of some of the perks of living in an apartment complex and the amenities that come along with it. Pools, hot tubs, electric car charging ports, gyms, movie screening rooms, concierge services, underground garages, and that is just to name a few. These types of amenities would cost a pretty penny for homeowners.

The Ultimate List of CRE Tech Tools & Resources

CRM (customer relationship management)

REthink is a program used to track people, companies, properties and spaces, but also serves as a deal management solution to help guide brokers through each stage of a deal. There are features designed for everyone in the business of CRE.

Visit their site for more information https://rethinkcrm.com

Apto is software developed to give brokers the tools needed for CRM, deal management and back-office operations. Apto streamlines the entire lifecycle of a deal.

Visit their website to learn more https://www.apto.com

Lease Management

Real Data Management (RDM) helps real estate professionals to market, manage and lease their portfolios. They provide software for the CRE industry. 

Find out more by calling 1-877-RDM-0011 or by visiting their website at http://www.rdm1.com

Hightower was founded in 2013 as a leasing management platform to help landlords and brokers increase visibility, save time, and reach more tenants. Many real estate executives use Hightower for real time leasing analytics and a view into the performance of their portfolios, all in real time.

Check out their website for more info https://gethightower.com

Marketing

Based in New York City, Floored is a company that creates interactive 3D graphics and technology for the commercial, residential, industrial, hospitality, and retail real estate industries. 

Floored has recently been acquired by CBRE.

For more information, visit their website at http://www.floored.com 

Property Capsule is a cloud based app that updates all of your platforms from one location. Upload all of your information to one place. All your materials – plans, maps, photos, property characteristics, ect.

Visit their website to get a full detailed description http://propertycapsule.com 

Property Management

Property Matrix is a property management portal that has many features some of which include: online payments, check scanning, check printing, customizable fields, comprehensive document management, communications hub, websites, tenant portals, and much more.

Check out a demo on their website https://www.propertymatrix.com

AppFolio is a cloud-based property management software for residential, commercial, apartment, student housing, and HOA property managers. It is complete with accounting and property management functionality. Headquartered in Santa Barbara, CA, AppFolio is an easy-to-use software for small and mid-sized businesses.

See all of their capabilities by visiting their website at https://www.appfolio.com

What does this year hold for Commercial Real Estate? Let’s take a look at the five trends to look out for in 2017.

1. Non-bank lending

Expect private lenders to be very busy this coming year and possibly for years to come. These lenders are willing to provide funding for transactions that banks don’t want to handle due to some involving more risk.

Another reason we are seeing lenders slowdown is because they are gearing up for the part of the Dodd-Frank Act that requires sponsors of commercial mortgage-backed securities to hold on to 5% of every new deal or assign the risk to a B-piece buyer.

Already, in the third quarter of 2016, we saw non-bank lenders make up 13% of New York City’s commercial real estate lending.

2. Interest Rates

Interest rates were just raised by a quarter of a percentage point. This is the Federal Reserve’s first increase since 2006. What does this mean for commercial real estate? This rate hike was a small one, however, it is said that subsequent hikes are predicted for this year. For CRE, this means that property deals could be constrained by making real estate less affordable.

Higher interest rates usually signal a strong economy, which typically tends to be associated with a strong real estate market.

3. Financial legislation

Now that we have a new president, one who does not believe in what our last president put into action, we could see some changes. It looks like Trump’s team “will be working to dismantle” the Dodd-Frank Act that Obama put into place during his term as President. Experts have said it’s highly unlikely that the law will be totally erased. However, under our new administration, we will likely see fewer effects by this new law.

We could look at it two ways: fewer regulations are easier for banks in the short term and over-the-top requirements are apt to stifle lending. On the other hand, if lending practices are too relaxed, our environment could potentially see another financial crisis. 

4. White House and Wall Street

By the looks of it, commercial real estate and financial lending will be well represented in the White House. Our new secretary of the treasury is former Goldman Sachs banker, Steven Mnuchin and director of the National Economic Council is former Goldman Sachs president, Gary Cohn. Mnuchin has said his number one priority is to “strip back parts of Dodd-Frank that prevent banks from lending”. The new transportation secretary is former member of the Wells Fargo board of directors, Elaine Chao.

5. Foreign Investment

From recent news, Chinese real estate deals and other investments may be on the downward slope. Chinese investments were up more than 50% last year, and now the financial press reported they are ready to clamp down on those investments.

Let’s keep in mind that last year’s foreign capital investment in commercial real estate was concentrated in just five markets: New York City, Los Angeles, Atlanta, Chicago and Dallas. Although the foreign investments may be slowing this year, they will still be significant. Foreign investors look at commercial real estate as one of the smartest places for their dollars and properties here in the United States offer overseas investors a safe place for their capital.

Seven of the Biggest Real Estate Tech Deals of 2016

1)   Opendoor                   

Opendoor is a two-year-old San Francisco based startup that is on a mission to make buying and selling houses simple. And, not only simple, but, buying them simply online. Here’s how to sell your home through Opendoor: go to their website and describe your home, then you receive an offer on your home from Opendoor. According to Opendoor’s website, they claim the offer is based off a comparative market analysis and the home’s unique story. Next is the home inspection. Opendoor performs a free home inspection to confirm the condition of your home. Then you pick your move out date. The rest is up to Opendoor. They find a buyer and then you receive the funds on your chosen closing date. Can it really be that simple?! According to the testimonials on their website, it IS! Looking to buy a home? Opendoor makes it very simple for you! Check out their homes for sale on line and let them do the rest! They also offer a service to do a “Trade-In” on your current home. This is another example of how our world is constantly evolving to a digitally connected world. Get this though – Opendoor has a 30-day return policy! Unhappy with the home you just purchased through Opendoor? You can return it within 30 days of purchase! This may be something I have to see for myself.

2)   VTS-Hightower

Two leading Commercial Real Estate Tech Companies joined forces and together they have over five billion square feet in their combined portfolio. VTS and Hightower completed a merger agreement on November 29, 2016, with their vision being to “create the standard solution that landlords, asset managers and brokers want to make more informed decisions, improve efficiency, and ultimately drive better performance across their portfolios and the entire marketplace.”

VTS was formed in 2012 by two long-time friends, Nick Romito and Ryan Masiello and later joined co-founder Karl Baum. All three working in the commercial real estate industry, they saw a need for brokers, owners and investors to be able to collaborate in real time. VTS allows landlords and brokers to manage deals, identify rends and quantify performance all from the VTS dashboard on your desktop or mobile device.

Hightower was founded in 2013 by Brandon Weber. Much like VTS, Hightower is used for real time leasing analytics and seeing the performance of your real estate portfolio right on your handheld device or laptop. All of your leasing data is right at your fingertips with Hightower.

It is no wonder that these two companies have now merged into one, VTS-Hightower. This is a company to watch out for. This was one deal that was said to be “a historic moment for the real estate tech business”.

3)   Compass

Launched in 2013 by Ori Allon and Robert Reffkin, Compass has been steadily and aggressively growing ever since. With 23 offices across nine regions and a new app, Compass is bringing real estate in real time and Compass is now one of the largest owned luxury brokerages in the country. This app is meant to replace quarterly market reports. It gives both agents and consumers constantly updated housing data. In the app, you can filter your searches by neighborhoods, number of bedrooms, price range, and so on. But, you can also view more advanced metrics, such as prices per square foot, year-over-year analysis of median price, days on the market, and negotiability. Compass agents can also create PDF reports directly from the app to provide to customers that aren’t as app savvy. Be sure to check out their website to get a more detailed view of what it is this company can do.

4)   Real Matters

Real Matters was established in 2004 and now has offices in Buffalo (NY), Cincinnati (OH), Middletown (RI), and Markham (ON). The company is a provider of financial services technology. The company also provides property valuation services as well as casualty insurance inspections. Keep an eye out for this company….They were recognized as one of Canada’s 50 Best Managed Companies. They have also ranked for five consecutive years (2010-2014) as one of the top 25 growing tech companies in North America (in terms of revenue).

5)   LendingHome

LendingHome was started in 2013 by Matt Humphrey. Matt had an idea to find people the best way to get a mortgage. LendingHome helps people buy their homes “hassle free”. Their website claims there are no fax machines and get this – NO PAPERWORK. You can upload all of your documents online with the click of a button. You will have a customized dashboard when you log in to the site that will show you exactly where you are in the loan process. Their website breaks the process down by four steps. Sounds easy, right? Step one – Select your rate. Answer some questions about yourself and the property you are looking at. Answer a few yes or no questions that their system has developed based on the initial information you provided. Step two – Once you have chosen the loan scenario that best suits your needs, you will pay the $199 application fee and submit your project. Step three – Application submittal. Upload documents such as bank statements, Purchase Contract, insurance information, Escrow/Title information. Step four – Close your deal. You can start taking out draws as you go to cover your costs. The company claims that the application process takes 20 minutes and once approved, your loan can close in 14 days.

6)   Breather

Breather is an off-site office rental company. This Montreal-based company actually has its biggest market in New York. They rent out rooms in office buildings, furnish them, and offer them as short-term offices or meeting rooms. Some companies use Breather when their own conference rooms are booked up. Or, maybe they need to meet in a private place, outside of the office. Currently, Breather is in seven different cities within the US and Canada. Be on the lookout for this growing company.

7)   RealtyShares

RealtyShares was formed by Nav Athwal. The company offers a wide range of financing solutions for both commercial and residential real estate projects including both debt and equity. According to their website, the process takes just four simple steps. Apply in minutes, approval process takes 24 hours or less, RealtyShares underwrites, approves and funds your project, then they also service investments and manage investors. All with the click of a few buttons online. Raising capital can be a hard task and very time intensive. RealtyShares claims they can do this in a simple, streamlined way.

10 Best Holiday Attractions in Santa Barbara

  10. EL PRESIDIO DE SANTA BARBARA STATE HISTORIC PARK

Two Christmas traditions that most locals Santa Barbarians will know about happen every Christmas at the El Presidio: Una Noche de Las Posadas and La Pastorela. Songs, refreshments and activities for the kids are some of the fun happenings at these events. La Pastorela is the tale of the shepherds journey to Bethlehem to witness the birth of Christ. Una Noche de Las Posadas commemorates Mary and Joseph’s journey from Nazareth to Bethlehem. There is a performance (entirely in Spanish). And, it is held at one of Santa Barbara’s oldest buildings. This year the performance is on Friday, December 16th at 7:00 PM. For more information on attending this special holiday production, call (805)965-0093.

   9. CASA DEL HERRERO 

The Casa Del Herrero is a beautiful Montecito home that was built in the 1930’s. A Spanish Colonial Revival home, its name meaning “house of blacksmith” pays tribute to the owners’ machinery industry. Owners George and Carrie Steedman and a host of architects, designers and horticulturists are all behind this beauty. There are several dates in December where the public can visit the house when it’s dressed up for the holiday season, but, reservations must be made in advance.

   8. LA ARCADA

One night out of the entire year, you don’t want to miss this annual Christmas celebration complete with carolers, freshly popped popcorn, and a visit from Santa. There are many things to do in this area as it is directly off of the popular State Street. You can browse the shops, have dinner at a nearby restaurant, or even visit the turtle pond. Did we mention the statues? Don’t forget to go visit the painter...

   7. THE GRANADA THEATER

This is the place to go if you want to see The Nutcracker Ballet, a Christmas tradition for some. And, for local Santa Barbarians, this is our place to go just for that! This venue is one of Santa Barbara’s most beautiful performing arts venues, with over 1,500 seats. The Granada Theater was built in 1924 and went through a dramatic restoration in 2008. Visit their website for a complete list of the upcoming shows to catch at this beautiful theater!

   6. ARLINGTON THEATRE

The last venue is beautiful, but there’s a reason we put this at the spot in front. This venue is absolutely gorgeous! They also have an annual Nutcracker Ballet but with a live symphony orchestra. This beautiful piece of architecture was built in 1931, part of the Spanish Revival architecture time. You will not be disappointed if you choose this place to see the Nutcracker this year!

   5. ICE IN PARADISE

Every December, Santa Barbara’s local ice skating venue puts on a fun holiday ice skating show! Check out their facebook page to get a list of dates and to stay up to date on their upcoming events. 

   4. SANTA BARBARA TROLLEY

Want to ride around the city and see all the awesome Christmas lights?! YES! And, ride a trolley, sipping cider while you do it?! YES YES YES! Where do I sign up?! This is a 90-minute ride on an open-aired trolley. The only problem is that is usually sells out every year around October so you have to really be prepared for this fun-filled night!

   3. THE MIRACLE ON EAST QUINIENTOS STREET

Want to see the BEST Christmas lights in Santa Barbara? The MOST lights in Santa Barbara? This is the house to visit! Local man, Peter Estrada, draws a crowd to his house year after year. And, once you visit, you will see why! He lights up the entire east side with the lights on his house. 

   2. SANTA BARBARA PARADE OF LIGHTS

This isn’t just a parade. It’s a BOAT parade! A boat parade with lights and fireworks! This is an annual tradition in Santa Barbara and is preceded by Santa’s Village activity on the City Pier in the Harbor starting around 3pm. Around 5:30PM is when the boat parade begins with  dozens of boats competing to win prizes. Admission is free and it’s not a bad view either!

   1. HOLIDAY PARADE

For over 60 years, this parade has been a local favorite event to welcome us into the Christmas season! Always the week after Thanksgiving, this parade is the only evening street parade of the year. At the end, you will be greeted by Santa Clause himself and all the kids will be cheery and bright!