Class B&C Properties Gaining Value

Excellent one-pager from Multi Housing Advisors on the declining inventory (and therefore rising value) of the Class B and C apartments in many key cities. There has been a lot of talk lately about the surge of new construction, but that is almost exclusively Class A space. In fact, the actual number of housing units available in the B and C class has been decreasing in many cities due to poor maintenance and the fact that older buildings are being demolished to make room for higher priced Class A projects. At the same time, the rising immigrant population and the large segment in general of Americans who are looking for a clean, affordable and larger apartment is growing. As value players

Thoughts on Interest Rates

As I write this everyone is still waiting to see what the Fed does later this afternoon with respect to a September interest rate “hike” – if a quarter-point, one-and-done increase can really be called a “hike”. But, regardless of what happens today, a rate increase of some sort will certainly happen at some point in the next 12 months. What might the impact be on commercial real estate – especially the sorts of assets like those owned and managed by PGP? CoStar just put out this opinion piece, and I think it is a good one. A few points from the article: However, according to a new report issued this week by accounting firm EY, the relationship between interest rates and CRE values is much

Demand Driving Prices in Japan and U.S.

Good interview published yesterday in Bloomberg news with JLL CEO Colin Dyer on the state of the Commercial Real Estate market. Most of his comments are more applicable to the big deals being done in the large coastal cities, but his point on the market staying strong for at least the next two years is a good one. From the article: The commercial property cycle has another two years to go with prices in some of the world’s largest cities set to extend gains, underpinned by office demand and attractive returns amid low interest rates, according to the chief executive officer of property-services company Jones Lang LaSalle Inc. "There is enough robust demand in the market," Colin Dyer said in

Student Housing Demand Surging

There have been some interesting stories on the trend of more “luxury” student housing at college campuses throughout the USA. Colleges are increasingly turning to privately operated student housing complexes in order to make up for dorm room shortages, and students are finding better amenities and living standards than those offered in traditional dormitories – all for essentially the same price. PGP is actively looking for a well-positioned student housing investment that meets is other investing criteria. From the CNBC article: "What you've seen over the last several years has been more of an urbanization of student housing, where more institutional players are coming in and developing t

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