H. Pike Oliver compiles this weekly update of real estate and community development news focused primarily on the USA. The inclusion of an article does not imply endorsement. And please note that some links may lead to items that are behind a paywall.
The coronavirus is causing massive market volatility as the appetite for risky assets is plummeting. The 10 year Treasury is at an all time low closing today at 1.32%. The 30 year is at 1.80%. This is in comparison to 30 day LIBOR at 1.61% (29.9 years of “curve” is 19 bps). This shows a market that is anticipating very low economic growth and inflation for the near future.
The market may or may not be overreacting. The absence of hard data and rampant speculation compounds to create massive uncertainty. The coming months will be telltale as the effects start to be measured in hard data and the spread rate becomes more apparent. We are seeing lenders institute fixed rate floors as risk spreads often widen with indexes plummeting.
Some macroeconomic trends to be aware of are: (1) Coronavirus will have an immediate effect on the hospitality sector; (2) The 2020 Tokyo Olympics may be cancelled at a cost of $25B if there is no containment by May; (3) The Chinese economy is slowing and Q1 results of U.S. companies doing business in China will be affected; (4) 2020 GDP growth is expected to be 2.0%.
There’s a battle underway in Washington, D.C., and its outcome will have a profound affect on the built environment in the United States. This has to do with the fight over regulatory enforcement of the Community Reinvestment Act (CRA) of 1977.
In a housing pro forma, the majority of revenue is typically in the category referred to as “base prices”. However, some sites may have significant “lot premiums” that can either increase your profits or provide the ability to be more aggressive with a land price in competitive land markets. For the most part, these lot premiums are generally derived from views, lot size, privacy, and cul-de-sac locations.
Landmark Properties has acquired Sol at West Village, a 2,289-bed student housing community at the University of California, Davis (UC Davis) campus, which is situated about 15 miles west of Sacramento. While the sales price was not disclosed, the transaction appears to he the largest single-asset sale to date in the student housing sector.
It’s been described as a cave dwelling, a wizard’s house and a Moorish palace. A recently unveiled building to house UC Berkeley students has been a long time coming — and its unusual design is causing a stir.