The Real Deal New York

National Cheat Sheet: Industrial rents hit all-time high, homeownership rates increase nationwide … & more

By Jeff Vasishta | July 28, 2017 03:20PM

Clockwise from left: Belin & King Bee mural in the Bronx, Amazon’s warehouse in Lehigh Valley, PA, Manhattan skyline.

Industrial rents hit an all-time high

JLL’s Q2 industrial report shows just how dramatic the impact of retail’s demise and e-commerce’s growth has had on industrial real estate. According to the report, rents in the booming sector rose a record-breaking $5.35 per square foot nationwide. This coincides with a report at CBRE released last month revealing that over half of the 167 million square feet of new warehouses currently under construction have already been pre-leased. [Bisnow]

Home ownership rate improves after hitting 50-year low: report

A new report by the U.S. Census bureau reveals that home ownership was up one percentage point — at 63.7 percent — after hitting the 50-year low of 62.9 percent at the same time last year. While one percent may seem insignificant, experts told the Wall Street Journal that other indicators in the report also point to an improved market: the number of new homeowners was higher than the number of new renters for the second quarter in a row. [TRD]

Foreign buyers invest in record numbers in U.S. real estate

American real estate is still tops when it comes to a global safe haven for parking cash. Foreign buying continues its unbridled ascent into the stratosphere according to new numbers from The National Association of Realtors (NAR). In a 12-month period from April 2016 to March 2017 there was a 32.37 percent growth over the previous year, with buyers from China, India, Canada, Mexico and the U.K. being particularly active. [TRD]

A new fund helps EB-5 applicants keep their money working while waiting for green cards

Greystone, Capital United and fintech firm NES Financial have just made life a lot easier for EB-5 green card applicants who have received money back from their initial required investment without receiving their permanent residency. The EB-5 program requires foreign nationals to invest heavily in order to be eligible for a green card. However, until recently the initial investment had to still be ongoing at the time of issuance. The companies launched what they say is the first redeployment fund that takes advantage of the U.S. Citizenship and Immigration Services’ June 14 guidance, which allows applicants to reinvest their money in a related venture to the first investment in order to preserve their legal status. [TRD]

West Coast cities outpace the east in yearly price increases

Best Coast! New York home prices only rose 4 percent from May 2016 to May 2017, while Seattle increased 13.9 percent and Portland improved by 8.9 percent, according to the latest S&P CoreLogic Case-Shiller Index. Los Angeles was in step with national figure, with an increase of 5.6 percent, which is the national average. Although Miami house prices rose in May by 5.3 percent over the previous year, the city was the fifth-lowest in increases for the top 20 U.S., markets. Generally, the East Coast metropolitan centers did not perform as well as western cities. [TRD]

Major Market Highlights

Chinese government bets big on US real estate with large stake in NY-based REIT

China Investment Corp is the second-largest government-owned investment fund in the world and it has just bought a 16 percent state in U.S. lender TPG RE Finance — a huge vote of confidence for U.S. real estate. The New York-based REIT originates and buys loans for commercial developments including offices, hotels and apartments. [Bisnow]

The only way is up for record-breaking L.A. property values

There’s good and bad news for LA property owners. The good news is that the real estate market is on fire, with property values up 6 percent over the last year, the Los Angeles Business Journal first reported. The bad news is that with it comes higher L.A. County real estate assessments and thus higher property taxes for homeowners. “As an economic indicator, this demonstrates that Los Angeles is very strong in residential and commercial properties and people are buying here,” L.A. County Assessor Jeffrey Prang said. [TRD]

Investment sales activity still red-hot in the Bronx

If there was any doubt that after decades in the doldrums, the Bronx is on an upswing this is it: a new report from Ariel Property Advisors shows that investment sales activity during the first half of 2017 fell in Brooklyn and Queens, but rose in the Bronx. A total of $968 million in real estate property transactions occurred from January 2017 to June 2017 — a 3 percent increase over the previous six months. [TRD]

Offices with skyline views of San Francisco are the third-most expensive in the country

San Francisco’s offices with scenic views are behind only New York ($87.90 per square foot) and Washington D.C. ($83.09 per square foot) in lease price. A look at the bridge and bay in the formerly hippy-centric city is likely to set you back $76.11 per square foot, according to JLL’s 2017 Skyline report. Surrounding Bay Area cities aren’t cheap, either. Oakland’s rents are the eighth-most expensive in the country at $54 per square foot. San Jose’s office rents average $45.56 per square foot. [Bisnow]