The quality of new loans on U.S. apartment buildings dropped in the second quarter, putting multifamily properties at greater risk of price declines should rent growth stall, according to a study by Chandan Economics.
U.S. banks increased financing for commercial real estate in the fourth quarter for the first time in almost two years as default rates dropped and lenders shed more foreclosed properties, Chandan Economics said.
U.S. commercial real estate sales in the first half totaled about a quarter of the average of the previous six years as owners kept properties off the market, impeding investors with record funds for purchases.
Manhattan developers are planning the city’s biggest decade of office construction since the 1980s, betting on rising demand for modern space even with tenants unsigned and the availability of financing more limited.
Amazon.com Inc., which agreed to buy its Seattle headquarters for $1.16 billion, plans to start construction next year on the first of three new buildings that would add another 3 million square feet (278,700 square meters) as technology companies expand and invest in real estate.
Orchard Pointe, a 17-year-old, vinyl-sided apartment complex in Vancouver, Washington, wouldn’t have drawn a second look from Invesco Real Estate in early 2010, when most multifamily-property investors wanted newer, trophy buildings in coastal markets such as New York and San Francisco.