Author Archives: levercp

Positive Outlook for Commercial Real Estate through 2018, into 2019

It’s been a good run for us in all sectors but that will clearly be coming to an end. I think the article nails it regarding industrial moving forward as being an outlier with vacancy remaining steady for a few years. We’ve been gearing up to find higher leverage on office and retail properties since those sectors will lag an invariably need more capital than in the past few years.

The other trend we’re seeing is on the construction side. The piece mentions increases in costs and it seems be getting worse with all the tariffs being put in place so we’re working with a lot more non bank commercial real estate lenders to get these deals done. Hopefully there won’t be a double whammy with commercial real estate mortgage interest rates increasing this year.

– Adam Horowitz (Principal of Lever Capital Partners and President of the Real Estate Capital Alliance).

Click here to read more about how ULI’s Forecast Calls for Positive Outlook through 2018, Slowing in 2019.

Apartment Developers Try to Figure Out the Parking Equation in a World of Fewer Cars

Parking is coming up more and more as a topic when we are working on development deals. The article hit on the biggest change which is the local government’s willingness to work with the developer regarding the amount of parking per unit. When sourcing a few commercial real estate loans in Las Vegas for multifamily projects we noticed a flexibility from all the parties to discuss this issue and come to a solution that works for everyone. If there’s a sea of change regarding car ownership in the near future this will make for some very interesting commercial real estate news topics for a while.

– Adam Horowitz (Principal of Lever Capital Partners and President of the Real Estate Capital Alliance)

Click here to read more about how parking requirements are impacting apartment developers.

Oversupply Leads to Higher Concessions in the Office Sector

This article hit home as it directly effects the commercial real estate refinance market in the office sector. There have been two projects that we worked on recently where the concessions were much greater than the sponsor anticipated thereby modifying the loan proceeds. In both cases the commercial real estate mortgage interest rates have remained steady and we were able to cut costs in a few areas getting us close to the original dollars. We agree, as Homa notes, that base rental pricing hasn’t changed much so there’s been an ability for lenders to provide additional funds as the concessions burn off. Keeping an eye on each market is difficult and the article did a good job of spelling out which ones are more challenged than others.

-Adam Horowitz, Principal of Lever Capital Partners and President of the Real Estate Capital Alliance

Click here to read more about the oversupply problem and higher concessions in the office sector.

Affordable Housing: Rising Construction and Labor Costs

This article is very relevant for many of the commercial real estate loans we’ve been working on in both the market rate and affordable housing development markets. We’ve noticed that the material cost has been trending upwards for the last year but the increased labor costs have varied depending upon what market the project is located. This new pricing has created pressure on a few of our developers to either cut costs or increase the leverage to attain the same profit margin. While commercial real estate lending pricing for construction hasn’t increased much, higher loan to value loans have been hard to come by. That said, we’ve been able to accommodate many of our clients to help offset the additional costs.

-Adam Horowitz, Principal of Lever Capital Partners and President of the Real Estate Capital Alliance

Click here to learn more about the growing costs in the affordable housing development market.

Preparing for the Impending Real Estate Downturn

​It’s good to read articles like this to keep things in perspective. Yes, there has been quite a run up in the commercial real estate space recently and the downturn will be inevitable. Having been through a few cycles already, some of the ideas they site are ​good ones. When the market is rising everyone seems to be a genius, but your real estate knowledge will be truly tested when the market moves against you. So getting ahead of the issues by negotiating long-term leases, pursuing rehabs, working on maintenance issues and embracing technology is sound advice. We can either help you in advance or when the poop hits the fan. The choice is yours.

-Adam Horowitz, Lever Capital Partners

Click here to read about how you can prepare for the inevitable real estate downturn

 

Increase in Multifamily Development Costs

​As the cost of lumber, steel, other materials and labor increases, a strain is being put on the multifamily apartment developers​. For a group that raises capital like ours, this makes our job a little harder since the margins tend to decline in this type of environment. At this part of the cycle our job is to determine the strength of the borrower and work towards making sure they have the best team put together. Weaker developers will have a harder time getting financing. You’ll have to show a proven ability to develop similar projects at or below cost to get the lending and investing community excited about your deal.

-Adam Horowitz, Principal, Lever Capital Partners

Click here for more insight on apartment development projects becoming more expensive

 

Is Apartment Development Specifically for Short-term Rental the Future?

There are going to be plenty of pivots regarding the short-term rental market. Many owners and developers are trying to take advantage of what they see as a way to capitalize on the increased use of services like Airbnb. Although markets like NYC and Las Vegas crack down on the use of short-term rentals in larger buildings or in residential neighborhoods, those cities and others are looking for ways to make it work within the legal system. I’ve seen transactions come across my office for whole buildings and condo type spaces that plan on catering to short-term rentals. I think the market will look very different in a few years as the various models sort themselves out.

-Adam Horowitz, Principal, Lever Capital Partners

Click here for more insight into short-term rental projects

Millennials and Multifamily Properties

​Ahhh Millennials, aren’t they the best.​ This article hit most of the key points in terms of what they’re looking for in the apartment rental market. I was hiking yesterday with a young millennial who said he never desires to own a car, wanted an apartment that was convenient to public transportation, and that he needed that apartment to be near food options that catered towards a more eco friendly young crowd (i.e. vegan or vegetarian). What does this mean for the apartment market? If the units in your building are tech forward so your tenants can work from home, and they have some of the amenities listed in the survey below, then you have the ability to draw millennials to your new or renovated property.

-Adam Horowitz, Principal, Lever Capital Partners

 

Click here to see the 2018 Consumer Housing Insights Survey conducted for the NMHC:

http://www.nmhc.org/uploadedFiles/Articles/Analysis_and_Guidance/2018-Consumer-Housing-Insights-Survey-One-Pager.pdf

Nevada Construction Projects Funded with Out-of-State Lenders

Lever Capital Partners’ Amnon Cohen and other commercial real estate professionals spoke with Nicole Raz of the Las Vegas Review-Journal to discuss new construction projects being funded by out-of-state lenders.

Click the link to read the article and view a video of Amnon Cohen sharing his insight on local lenders and construction projects: https://www.reviewjournal.com/business/many-new-nevada-construction-projects-funded-by-out-of-state-cash/

Podcast: Las Vegas Money Resource with Travis Scribner

​”It was a pleasure to sit down with Travis ​Scribner of WestPac Wealth Partners. I’ve been listening to his podcasts recently and always enjoyed his interviewing style where he digs into the professional, personal and community aspects of his guests. During my podcast I was able to talk about my path to the creation of Lever Capital Partners, knowledge of the Las Vegas market, involvement in the Entrepreneurs’ Organization and being the President of the Real Estate Capital Alliance.”               – Adam Horowitz, Principal, Lever Capital Partners

Click here to listen to Lever Capital Partners’ Principal, Adam Horowitz, talk with Travis Scribner:

http://lasvegasmoneyresource.libsyn.com/adam-horowitz-principal-of-lever-capital-partners