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KKR Enters Seattle Real Estate Market – Business Wire

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NEW YORK–(BUSINESS WIRE)–KKR, a leading global investment firm, today announced the closing of two real estate transactions totaling over $1.2 billion located in the greater Seattle region, including the Summit located in downtown Bellevue and the F5 Tower in downtown Seattle.

The Summit is a 915,000-square-foot Class A office complex in the Bellevue central business district. The complex is 99% leased, and is comprised of two existing LEED Platinum office buildings and a third building currently under construction, expected to be completed in Q3 2020. The properties are well located in the heart of the central business district, one block from the Bellevue Transit Center and the Bellevue Downtown Light Rail Station opening in 2023.

F5 Tower is a recently completed 43-story tower in the Seattle central business district, which includes the 100% leased 516,000-square-foot office condominium acquired by KKR alongside a separate 189-room luxury hotel. The property is architecturally significant to the Seattle skyline and home to F5 Networks as their global headquarters.

“We are excited to be making these two real estate investments in the Puget Sound Region, a market we believe has attractive long-term growth driven by a highly educated employee base, attractive cost of living relative to other top tier markets in the U.S. and high-quality of life,” said Justin Pattner, KKR’s Head of Real Estate Equity in the Americas. “The region is the headquarters to several of the world’s largest companies, and has recently attracted others to build a significant presence in the region. We are looking forward to growing our own presence there with these transactions.”

The buildings will be operated by Urban Renaissance Group, a Seattle based real estate investor, developer, and manager of real estate, who assisted with the acquisitions.

Since launching a dedicated real estate platform in 2011, KKR has invested or committed approximately $9 billion in capital across over 200 real estate transactions in the U.S., Europe and Asia as of September 30, 2019. KKR’s global real estate team consists of over 85 dedicated investment professionals, spanning both the equity and credit businesses.

These investments are being funded by accounts co-advised by KKR and KKR’s balance sheet.

About KKR

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic partners that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside the capital it manages for fund investors and provides financing solutions and investment opportunities through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.

About Urban Renaissance Group

Urban Renaissance Group LLC is a Seattle-based full-service commercial real estate company, engaged in acquisitions, development, asset management, leasing, property management and ownership in Seattle, Bellevue, Denver and Portland. Founded in 2006, the strategic premise of URG is that the form of the American City will change dramatically during the next 20 years. The company acts as a catalyst that understands and ignites that change, thereby building community, generating appropriate returns for its investors and opportunities for its partners and employees. Learn more at www.urbanrengroup.com.

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Canadian Real Estate Sentiment Survey: Confidence wanes in Q4 | RENX – Real Estate News EXchange

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IMAGE: Q4 2020 REALPAC/FPL Canadian Real Estate Sentiment Survey reports confidence waned in the latter part of 2020. (Courtesy REALPAC)

Q4 2020 REALPAC/FPL Canadian Real Estate Sentiment Survey reports confidence waned in the latter part of 2020. (Courtesy REALPAC)

After plummeting in the second quarter and improving in Q3, confidence in the Canadian real estate market waned slightly heading into year-end, according to the Q4 2020 REALPAC/FPL Canadian Real Estate Sentiment Survey.

The survey captured the thoughts of a variety of industry leaders, including chief executive officers, presidents, board members and executives from a broad set of sectors, including owners and asset managers, financial services providers, and operators and related service providers.

The quarterly survey measures executives’ current and future outlooks on overall real estate conditions, access to capital markets and real estate asset pricing. Survey respondents represent the retail, office, industrial, hotel, multifamily, residential and senior residential asset classes.

Data was collected in October 2020 and the report includes anonymous excerpts from interviews with participants as well as the survey data.

When asked to compare current market conditions to the situation a year earlier, 32 per cent of Canadian respondents believed they were much worse.

Forty-two per cent said they were somewhat worse, 10 per cent thought they were about the same, 14 per cent offered that they were somewhat better and two per cent opined they were much better.

The sentiment in the United States wasn’t far off from that.

The Canadian results to the same question in the third quarter showed: much worse 13 per cent, somewhat worse 60 per cent, about the same 15 per cent, somewhat better 10 per cent and much better two per cent.

General market condition sentiment

Uncertainty remained in the Canadian real estate market moving into 2021, though there was some optimism about vaccines reducing COVID-19 concerns.

Three per cent of Canadian respondents thought general real estate market conditions will be much worse in a year.

Twenty-four per cent said it will be somewhat worse, 18 per cent responded it will be about the same, 47 per cent believed it will be somewhat better and eight per cent opined it will be much better. Those results are relatively close to those from the U.S.

A selection of quotes from respondents:

– “I would describe market conditions at a lower level in Q4 2020 versus 2019, but still stable and reasonable. There’s high liquidity in the marketplace for mortgage debt and refinance opportunities are very solid. We are seeing fewer transactions as there are not as many sales. Refinancing or repositioning financing and development financing are all quite strong.”

– “The next 12 months will see a tremendous number of small businesses fold and the result will be much higher vacancies, lower rents and higher cap rates. Overall, 2021 and 2022 will be very difficult for commercial real estate; however, the downturn will be good for transactions in the later part of 2021 and much of 2022.”

– “(There are) more unknowns today than at any given time in the last 20 years. With the exception of hospitality and retail, private markets are slower to react as players in the market try to digest. (There’s a) slow realization that previously unassailable sectors like office and residential will be impacted, but the extent is a question mark. If unemployment remains where it is for a period of time, and government support ebbs, it will have an impact across the spectrum. The biggest factors in a recovery are treatments/vaccines for COVID-19 as well as continued government support and a subsequent stimulus/recovery plan.”

Asset values sentiment

Transaction volume remains low, resulting in inconclusive asset valuations. Distressed transaction activity has yet to emerge in Canada.

Six per cent of Canadian respondents believed asset values will be much lower in a year, 29 per cent said they will be somewhat lower, 26 per cent thought they will be about the same and 39 per cent stated they’ll be somewhat higher.

No respondents believed they will be much higher. All of those numbers closely mirror those from the U.S.

Here are some quotes from participants:

– “There is a bifurcation in real estate values. Residential and industrial are still doing well while retail and, to a lesser extent, office is struggling. This will not change as there are some systemic changes taking place in the use of real estate.”

– “At a macro level, rent rolls are being suppressed because businesses are uncertain. With that being said, if your rent is questionable, that’s going to have an impact on your asset value and it will spread a lot of cold water on transactions. Within retail, the pandemic is driving the impact. The bricks and mortar contest against online will continue. Tenants are in trouble as the pandemic accelerates asset devaluation in retail. On the commercial side, I think that it is a temporary issue. I see the watermark on operating expenses showing up right now. There’s not a lot of movement in assets so there’s not a lot of transactions to show if this is a true downturn. Depending on a company’s capital structure, organizations might get aggressive on devaluing assets to give themselves a bit of head room for the next couple years, but that’s more aggressive tax planning. There’s devaluation because of rent, and the watermark on operating expenses. This is where technology comes in and delivers. In a building that is not run efficiently, technology will offer operating costs on a fixed basis causing NOI to go up.”

Debt capital sentiment

Lenders remain active, though there’s an increased level of scrutiny during the due diligence process, with many less willing to engage in higher risk investments.

Four per cent of Canadian respondents said the availability of debt capital will be much worse in a year.

Twenty-two per cent thought it will be somewhat worse, 29 per cent believed it will be about the same, 39 per cent opined it will be somewhat better and six per cent responded it will be much better.

There was a wider discrepancy with the U.S. results in this category. There was less optimism south of the border, where the respective sentiment numbers were two, 15, 38, 40 and five per cent.

Here are some quotes from respondents:

– “The dichotomy among the lending community is staggering. Rates change so quickly.”

– “We prefer Tier 1 and Tier 2 banks. Tier 1 banks are most cautious while Tier 2 banks are more willing to have a conversation. Alternative lenders see this as an opportunity.”

Equity capital sentiment

While equity capital is available, investors are increasingly discerning when evaluating investment track records and leverage ratios.

Two per cent of Canadian respondents thought the availability of equity capital will be much worse in a year.

Six per cent said it will be somewhat worse, 36 per cent responded it will be about the same, 52 per cent believed it’ll be somewhat better and four per cent said it will be much better. Those numbers are pretty close to those from the U.S.

Some quotes from participants:

– “(Equity capital is) not as bad as we thought it would be. Alignment between objectives with investors is very important. We would not go on a road show right now.”

– “We have had groups express interest. Investors are looking for a history of being conservative with debt. There are more conversations around risk mitigation versus track records.”

– “People are looking for anywhere where they can find a decent level of risk-adjusted return. There is a lot of capital moving into the space in private markets in general, whether it’s equity or debt.”

REALPAC and Ferguson Partners

REALPAC is the national industry association dedicated to advancing the long-term vitality of Canada’s real property sector.

Its more than 120 members include publicly traded real estate companies, real estate investment trusts, private companies, pension funds, banks and life insurance companies with investment real estate in all asset classes.

Ferguson Partners compiled the sentiment survey in conjunction with REALPAC.

The boutique talent management firm is involved with executive and board recruitment as well as compensation, leadership and management consulting.

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2020 marked year of 'unprecedented' growth for Hamilton-area real estate market – TheSpec.com

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Not even a global pandemic could stop the Hamilton-area real estate market from growing last year — and in more ways than one.

Nearly 15,000 homes were sold in 2020, marking an 8.4 per cent increase from 2019, while the average price of a home rose by 16.8 per cent to just a little more than $690,000, based on the latest figures released by the Realtors Association of Hamilton-Burlington (RAHB).

The latter is the “most surprising” figure, said RAHB president Donna Bacher, in an email to The Spectator.

“An almost 17 per cent growth in the average price — growth that would normally take two to three years to match — with sales and new listings being relatively normal is crazy,” said Bacher. “Even crazier is this unprecedented growth in average price happening in a year that was unprecedented to begin with.”

The market experienced a “slight slowdown” in March and April as the world ground to a halt due to COVID-19.

In April, the organization reported 484 residential sales in the month of April, a decline of 63.4 per cent compared to April 2019 and 56 per cent compared to March. Realtors pivoted in the wake of changing public health guidelines — and like everything else, open houses and showings went virtual.

The association had expected 2020 to “be a good market,” but the “uncertainty” around lockdowns stifled their expectations.

Bacher credited the “unexpected” gains to “government stimulus packages” as well as low-interest rates.

They also saw an influx of new buyers they never could have predicted.

“I don’t believe we expected the flee to detached homes and the migration radiating outward from Toronto influencing the number of sales in the (our) market area,” said Bacher.

In Hamilton, a detached single-family home sat on the market for an average of 24 days in 2020 compared to 31 in 2019. For Hamilton semi-detached, townhouses and row houses, the average number of days on the market was just 18, compared to 29 in 2019.

No community in the area covered by RAHB, which includes Niagara North and Haldimand County, saw a drop in their average home price last year, but new listings were down 7.4 per cent across the board compared to 2019.

Bacher said that the issue of “supply and demand” continues to drive up the prices of homes.

Back in 2010, the average price of a home in the region was $310,258 — last year’s stats represent a 125 per cent increase in the last decade, according to the association.

By the numbers

Hamilton saw a 10 per cent increase in sales, with the average price of a home rising by 18 per cent to $629,961.

Around the city, Ancaster experienced the highest jump in the number of sales with an increase of 26.7 per cent over 2019, while the Hamilton Mountain saw 2,113 home sales — topping the 2,045 processed in 2019. Dundas saw the largest drop in sales, falling to 304 sales from 323 in 2019.

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Flamborough held the highest average sale price at $969,322, but Bacher said that could be skewed by property size and type.

Burlington saw sales increase by six per cent and the average price of a home climb to $878,372.

Haldimand saw the most dramatic drop of listings, with a decrease of 19 per cent. But, the average price of a home in the area increased to $547,355 and the numbers of sales rose by seven per cent.

Niagara North saw an 11 per cent increase in sales, with the average price of a home rising by 15 per cent to $664,921.

By the numbers

Hamilton saw a 10 per cent increase in sales, with the average price of a home rising by 18 per cent to $629,961.

Around the city, Ancaster experienced the highest jump in the number of sales with an increase of 26.7 per cent over 2019, while the Hamilton Mountain saw 2,113 home sales — topping the 2,045 processed in 2019. Dundas saw the largest drop in sales, falling to 304 sales from 323 in 2019.

Flamborough held the highest average sale price at $969,322, but Bacher said that could be skewed by property size and type.

Burlington saw sales increase by six per cent and the average price of a home climb to $878,372.

Haldimand saw the most dramatic drop of listings, with a decrease of 19 per cent. But, the average price of a home in the area increased to $547,355 and the numbers of sales rose by seven per cent.

Niagara North saw an 11 per cent increase in sales, with the average price of a home rising by 15 per cent to $664,921.

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Calgary's real estate rebound expected to continue in 2021: CREB – CTV Toronto

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CALGARY —
The Calgary Real Estate Board is predicting continued growth in Calgary’s housing market this year as result of low lending rates, but ongoing challenges are expected to prevent a substantial increase.

In its annual forecast released Tuesday, CREB predicted total sales in Calgary would increase in 2021 by nearly five per cent compared to last year’s sales.

The 2020 sales numbers exceeded initial expectations, bolstered by a rebound in the second half of the year as demand outpaced supply.

“It is expected some of the momentum recorded at the end of 2020 will continue into 2021, fueled by exceptionally low lending rates and pent-up demand,” said Ann-Marie Lurie, CREB chief economist, in a statement. “While sales are expected to rise by nearly five per cent on an annual basis in 2021, persistent economic challenges are expected to prevent stronger growth in our housing market.”

CREB is expecting an increase of listings in 2021 as homeowners facing economic challenges may need to sell during high unemployment, while other owners who were reluctant to list at the onset of the COVID-19 pandemic begin to enter the market.

The board is predicting 2021 prices to be one per cent higher than 2020.

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