Katchen Company Real Estate Videos
More Office Building Landlords are giving their properties back to the Lenders
The increase comes against a backdrop of property owners being hindered in their ability to refinance maturing loans as rising interest rates have boosted borrowing costs. Lenders have also tightened their standards. Other owners simply are not willing to keep pouring money into properties they see as poor performers.
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Real estate investing has always been seen as a lucrative avenue for wealth creation
Real estate investing has always been seen as a lucrative avenue for wealth creation. However, like any investment, potential risks must always be factored into the equation. One effective strategy to mitigate these risks when it comes to real estate investing is through diversification. There are a few different ways that diversification can be interpreted when it comes to real estate investing so understanding these different avenues and capitalizing on each opportunity is important for investors. Portfolio diversification also leads to other benefits besides mitigating risk that investors will want to take advantage of.
Retail Real Estate is Heating up Again
Big investment firms that have shunned retail real estate for years are giving the sector a fresh look, the latest sign that this long-beleaguered property type is on the mend. Institutional buyers are snapping up grocery stores, pharmacies, and other recession-resilient stores. Retail’s strong performance in recent years has also increased the sector’s appeal as remote work depresses demand for office buildings.
The warehouse Building Boom is Over
During the pandemic, developers plastered cities and suburbs with logistics facilities to profit from surging rents and seemingly insatiable demand from Amazon.com and other e-commerce companies. Now, many large investors are cutting back. Industrial property construction starts tumbled 48% in the first nine months of the year compared with the same period in 2022. That was the largest drop for that period since 2009.
Opportunity Zone Progress
Overseen by the Treasury Department, the Opportunity Zone Program went into effect at the start of 2018 and was immediately a hot topic in the commercial real estate industry. But ever since it was created, the program has been plagued with criticism over whether it is working the way it was intended to work: to lift up and revitalize disinvested communities through new development projects.
REIT Sector Attracting Increased Investor Interest
REITs have operated in a challenging environment throughout 2023, yet well-honed strategies of balance sheet discipline and transparency have enabled the sector to end the year on an optimistic note, with signs that 2024 may usher in interest rate stability and increased opportunity for REITs to boost external growth.
Spiraling Insurance Costs
Commercial real estate investors deal with spiraling insurance cost For some property owners, the impact of rising insurance costs has been more punishing than rising interest rates. Many landlords still have low debt costs because they signed long-term, fixed-rate mortgages before 2022 that don’t expire for years to come. But insurance contracts typically renew every year. Tenants ultimately pay the cost of these increases through the additional rent clause in their lease.
National Association of Realtors ask Fed to Stop raising Interest Rates
In a letter to Fed Chair Jerome Powell this week, the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and the National Association of Home Builders (NAHB) urged the Fed to state that it’s not considering further rate hikes and that it will hold off on selling any more mortgage-backed securities until the housing finance market stabilizes.
Student Housing is a Recession-proof Asset
As college students head back to school, they aren’t the only ones scoping out new opportunities on and off campus. Major real estate investors have been marching into student housing, drawn to the sector by its higher rent growth than traditional multifamily and its “recession-proof” assets.
Shared Office Workspace
The economic outlook for office buildings is mixed. While some sectors, such as tech and finance, continue to drive demand for prime locations, the real estate sector faces challenges due to the pandemic and changing work patterns. However, with the rise of remote work, there is potential for increased demand for flexible, shared workspaces.