{"id":1004056344,"date":"2012-12-19T10:13:52","date_gmt":"2012-12-19T18:13:52","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004056344"},"modified":"2022-12-08T15:00:43","modified_gmt":"2022-12-08T23:00:43","slug":"winds-of-change-for-m-f-reits","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/winds-of-change-for-m-f-reits\/","title":{"rendered":"Winds of Change for M-F REITs"},"content":{"rendered":"<p><em>By Anna Spiewak, News Editor<\/em><\/p>\n<div id=\"attachment_100405\" style=\"width: 160px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2012\/12\/Britton-Costa.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-100405\" data-attachment-id=\"1004056345\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/winds-of-change-for-m-f-reits\/britton-costa\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2012\/12\/Britton-Costa.jpg\" data-orig-size=\"296,221\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;}\" data-image-title=\"Britton Costa\" data-image-description=\"\" data-image-caption=\"&lt;p&gt;Britton Costa, of Fitch Ratings&lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2012\/12\/Britton-Costa.jpg?w=296\" class=\"size-thumbnail wp-image-1004056345\" title=\"Britton Costa\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2012\/12\/Britton-Costa.jpg\" alt=\"\" width=\"150\" height=\"150\" \/><\/a><p id=\"caption-attachment-100405\" class=\"wp-caption-text\">Britton Costa, Fitch Ratings<\/p><\/div>\n<p>Multi-family REITs are the investment haven of today. Tenant demand for multi-family units has been insatiable since the bursting of the single-family residential bubble, despite persistent macroeconomic headwinds. But according to a new report released last week by Fitch Ratings, what goes up does eventually have to come down\u2014not only in physics but, apparently, in commercial real estate, as well.<\/p>\n<p>\u201cWhen you speak to anyone in commercial real estate right now, they are just unbelievably excited about multi-family (investments), from the financing side to the property fundamentals side, and they\u2019re really euphoric,\u201d said Britton Costa, associate director at Fitch Ratings. \u201cThere are some very significant growth expectations being dug into the current acquisition environment, and we think that if things are less positive than today, people\u2019s minds can change very quickly, and people are very affected when something is (at its) best and then suddenly becomes worse.\u201d<\/p>\n<p>The multi-family sector has flourished in the past few years due to a slowdown in supply and superior access to capital, leading to material improvements in both operating and credit profiles of multi-family REITs, according to the Fitch report. Furthermore, the global rating agency estimates that 80 percent of the 2009-11 growth in multi-family demand was the result of declining homeownership.<\/p>\n<p>However, owning a home remains the American dream\u2014it was just delayed\u2014and single-family home sales are now also rising. In fact, they improved by 9.6 percent this year over last year, as the large pent-up demand resulting from the slowdown in household formation between 2008 and 2011 started to release thanks to steady job creation, according to a spokesperson for the National Association of Realtors. Fitch\u2019s homebuilding analysts believe there will be a slow but positive growth in home sales and prices nationally, with home sales growth for this year predicted to be almost 20 percent and medium price growth, 3.2 percent, according to Costa.<\/p>\n<p>That and a lack of affordability in rents are contributors to the likely coming slowdown in apartment demand and consequently in performance of multi-family REITs, as will the uncertain future of the government-sponsored enterprises. Fannie Mae and Freddie Mac have increased their exposure to the multi-family sector by $76 billion in the past five years to offset a similar decline in mortgage availability from traditional lenders. But there is limited political will to keep the GSEs under continuous guardianship.<\/p>\n<p>The multi-family market should continue to perform well in 2013, with the slowdown predicted for 2014 at the earliest, according to Fitch. (The vacancy rate is expected to shrink from 4.2 percent in 2012 to 3.9 percent in 2014, according to fourth-quarter commercial forecast data from the NAR.)<\/p>\n<p>\u201cThe key to this report is that we think there are an increasing number of risks that are not necessarily negative on the sector or the environment, but we think that investors should be conscious of this when looking at the sector, because it\u2019s tough for things to get much better than today,\u201d Costa concluded.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Anna Spiewak, News Editor: Tenant demand for multi-family units has been insatiable since the bursting of the single-family residential bubble, despite persistent macroeconomic headwinds. But according to a new report released last week by Fitch Ratings, what goes up does eventually have to come down\u2014not only in physics but, apparently, in commercial real estate, as well.<\/p>\n","protected":false},"author":952,"featured_media":1004056345,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1004056344","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Winds of Change for M-F REITs - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/winds-of-change-for-m-f-reits\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Winds of Change for M-F REITs\" \/>\n<meta property=\"og:description\" content=\"By Anna Spiewak, News Editor: Tenant demand for multi-family units has been insatiable since the bursting of the single-family residential bubble, despite persistent macroeconomic headwinds. 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