Cherrytree Group LLC Blog

Apartment construction is the place to turn for developers and contractors as the lukewarm housing market continues to tilt against home ownership.

Where you do not want to be is in the custom-home market. So many McMansions are available and they are available at half-price. But the apartment market is hot right now.

Multi-family housing is a good bet for area builders and developers, due to packed apartment buildings, low labor costs, easier financing and demographic trends indicating that there are more young people and empty nesters who can't or won't buy a house or condo right now all.

There's definitely growing demand for rentals.  In the past, a lot of (the new renters) might have been buyers of entry-level condos. But things have changed, and to some degree maybe permanently.

So, while construction activity in the building market still is weak overall, there has been an uptick in investing in apartment projects.  The numbers are still of from years gone by, there was more activity in the first half of 2011, and a general improvement.

'Mood and attitude'

Timing in this mini-surge may be a key factor as well.

Many companies hope to get new rental housing on the market rapidly, in order to capture available customers before the tide turns and more people want their own homes again.  Therefore, mood and attitude has so much to do with the trends that get going.

Home sales remain historically weak and seem likely to stay that way for some time as high unemployment, a foreclosure backlog and weak home prices keep many potential buyers from signing contracts.

In the meantime, apartments have become more popular.

For help and assistance in developing Real Estate in Massachusetts, contact the Cherrytree Group.

Original article – Wisconsin State Journal

The United States will remain the top choice of most global commercial real estate investors in 2012. While the United States offers the most stable and secure option for commercial real estate investment, investors say that improvements in rent and occupancy growth, as well as the repeal of a 1980 foreign investment tax have had the strongest impact on their investment decisions, according to the 20th annual survey of Association of Foreign Investors in Real Estate (AFIRE) members.

For the past year, investors in U.S. commercial real estate have focused on gateway cities such as New York, Washington, Boston, San Francisco and Los Angeles, and such activity has had the effect of driving prices up and yields down in those cities.

The United States is still very desirable, and was second behind the UK in attracting cross border investment in 2011, according to Real Capital Analytics preliminary figures.

60% of respondents said they plan to increase their investment in U.S. real estate in 2012, while 42.2% said they believed the United States in 2012 offers the best opportunity to see increases in the value of their commercial real estate investments.

Europe's sovereign debt problems and looming recession eliminated most of the countries there (except for Switzerland and Poland) from the radar of real estate investors. Germany lost about half its support among respondents in terms of stability and price appreciation.  Accordingly, survey respondents said they would invest more in U.S. commercial property if the fundamentals of rent and occupancy growth were stronger than in their own countries.

As for the types of U.S. commercial real estate that investors favor, respondents said that this year they would most likely invest in apartment buildings, the fourth consecutive year that multifamily real estate has topped the list. Of all the types of U.S. commercial real estate, the multifamily sector has not only recovered from the post-2007 real estate slump, but rents and occupancy are even stronger than pre=recession.

Warehouse and distribution centers ranked second, up from No. 5 last year. Office properties were third, up a notch from No. 4. Retail properties - shopping centers and malls - slipped to No. 4 from No. 2. Hotels ranked No. 5, down from No. 3 last year.

The survey was conducted in the fourth quarter by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business.