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Monthly Archives: April 2014

Marcus & Millichap Enters Canada with Three New Offices

Marcus & Millichap’s grand entrance into Canada can be symbolized by three brand new offices located in Toronto, Vancouver, and Calgary. The firm is also considering additional offices in either Montreal, Ottawa, or Edmonto.

Data from the 2013 year in review edition of Global Capital Trends, a quarterly report published by global commercial data and analytics firm Real Capital Analytics (RCA), revealed national cap rates for Canada were 75 bps below the U.S. in 2013, despite cap rates in Toronto being comparable to major metros such as New York and London.

Marcus & Millichap Enters Canada with Three New Offices

Marcus & Millichap’s grand entrance into Canada can be symbolized by three brand new offices located in Toronto, Vancouver, and Calgary. The firm is also considering additional offices in either Montreal, Ottawa, or Edmonto.

Data from the 2013 year in review edition of Global Capital Trends, a quarterly report published by global commercial data and analytics firm Real Capital Analytics (RCA), revealed national cap rates for Canada were 75 bps below the U.S. in 2013, despite cap rates in Toronto being comparable to major metros such as New York and London.

First Publicly Traded Real Estate Company Focused on the NYC Market Listed on the New York Stock Exchange

A New York landlord led by Nicholas Schorsch became the first publicly traded real estate company focused solely on the city with its listing on the New York Stock Exchange.

New York REIT Inc., formerly American Realty Capital New York Recovery REIT Inc., holds properties valued at $2.7 billion mostly in Manhattan. The company started purchasing properties during the early stages of Manhattan’s commercial real estate recovery and this year plans to purchase about $350 million in properties. The shares began trading at $10.70 and closed at $10.75.

“There should be some nice locked-up gains in those properties,” said Dan Fasulo, a managing director at global commercial data and analytics firm Real Capital Analytics Inc. The REIT was “able to pick up some properties in some pretty hot submarkets in Manhattan just before things took off.”

First Publicly Traded Real Estate Company Focused on the NYC Market Listed on the New York Stock Exchange

A New York landlord led by Nicholas Schorsch became the first publicly traded real estate company focused solely on the city with its listing on the New York Stock Exchange.

New York REIT Inc., formerly American Realty Capital New York Recovery REIT Inc., holds properties valued at $2.7 billion mostly in Manhattan. The company started purchasing properties during the early stages of Manhattan’s commercial real estate recovery and this year plans to purchase about $350 million in properties. The shares began trading at $10.70 and closed at $10.75.

“There should be some nice locked-up gains in those properties,” said Dan Fasulo, a managing director at global commercial data and analytics firm Real Capital Analytics Inc. The REIT was “able to pick up some properties in some pretty hot submarkets in Manhattan just before things took off.”

Essex and BRE Merger Means Greater Liquidity, Advantage of the REIT Model

With plenty of cash flow currently available, the recent merger between Essex Property Trust and BRE Properties is expected to be one of many REIT consolidations this year.

“It makes sense for REITs to consolidate. I wouldn’t be surprised if there was more REIT consolidation,” says Ben Thypin, Director of Market Analysis at Real Capital Analytics (RCA), a global data and analytics firm focused exclusively on commercial real estate. “The advantage of the REIT model is liquidity. The bigger you are, the more you can take advantage of the REIT’s model,” Thypin adds. “You can borrow more cheaply—both secured or unsecured debt.”

Essex reportedly paid $4.3 billion for BRE, leading to the formation of a new larger portfolio with nearly 56,000 housing units within 239 communities. The new Essex portfolio largely consists of assets in leading West Coast metros like Seattle, where the average multifamily property sold for $181,000 per unit in 2013, according to RCA data.

The BRE portfolio consisted of properties from mainly suburban areas in Los Angeles, San Diego and San Francisco. According to RCA data, the average price per unit in 2013 was $198,000 in Los Angeles, $209,000 in San Diego, and $287,000 in San Francisco. 48 of the 72 properties purchased by Essex from BRE were from garden apartment communities.

The newly merged company is expected to generate $1.2 billion in annual revenue and $10.4 in equity market capitalization. The larger REIT not only helps the new company save money on property expenses and gain access to more efficient financing, but also creates a new commercial real estate giant for the U.S. apartment market, specifically in the West Coast.

Essex and BRE Merger Means Greater Liquidity, Advantage of the REIT Model

With plenty of cash flow currently available, the recent merger between Essex Property Trust and BRE Properties is expected to be one of many REIT consolidations this year.

“It makes sense for REITs to consolidate. I wouldn’t be surprised if there was more REIT consolidation,” says Ben Thypin, Director of Market Analysis at Real Capital Analytics (RCA), a global data and analytics firm focused exclusively on commercial real estate. “The advantage of the REIT model is liquidity. The bigger you are, the more you can take advantage of the REIT’s model,” Thypin adds. “You can borrow more cheaply—both secured or unsecured debt.”

Essex reportedly paid $4.3 billion for BRE, leading to the formation of a new larger portfolio with nearly 56,000 housing units within 239 communities. The new Essex portfolio largely consists of assets in leading West Coast metros like Seattle, where the average multifamily property sold for $181,000 per unit in 2013, according to RCA data.

The BRE portfolio consisted of properties from mainly suburban areas in Los Angeles, San Diego and San Francisco. According to RCA data, the average price per unit in 2013 was $198,000 in Los Angeles, $209,000 in San Diego, and $287,000 in San Francisco. 48 of the 72 properties purchased by Essex from BRE were from garden apartment communities.

The newly merged company is expected to generate $1.2 billion in annual revenue and $10.4 in equity market capitalization. The larger REIT not only helps the new company save money on property expenses and gain access to more efficient financing, but also creates a new commercial real estate giant for the U.S. apartment market, specifically in the West Coast.

New York Market Hot With a Strong Pipeline of Deals

Real Capital Analytics recorded $8.64 billion in transactions for the New York commercial real estate market in Q1, with top deals including Related Cos.’ $1.3 billion purchase of Time Warner Inc. office condominium at Time Warner Center.

These figures are down from a year-ago and from Q4’13, but the market is hot. There are $8.72 billion worth of deals currently under contract and expected to close later this year. “People couldn’t get here to look at the properties,” says Dan Fasulo, Managing Director at global commercial real estate data and analytics firm Real Capital Analytics. But the in contract deals, “[bode] well for the second quarter to be very strong,” Mr. Fasulo says.

New York Market Hot With a Strong Pipeline of Deals

Real Capital Analytics recorded $8.64 billion in transactions for the New York commercial real estate market in Q1, with top deals including Related Cos.’ $1.3 billion purchase of Time Warner Inc. office condominium at Time Warner Center.

These figures are down from a year-ago and from Q4’13, but the market is hot. There are $8.72 billion worth of deals currently under contract and expected to close later this year. “People couldn’t get here to look at the properties,” says Dan Fasulo, Managing Director at global commercial real estate data and analytics firm Real Capital Analytics. But the in contract deals, “[bode] well for the second quarter to be very strong,” Mr. Fasulo says.