When it comes to commercial real estate, the market ebbs and flows depending on a number of factors. The maturity of the cycle, the strength of the asset class in question and the global investment landscape can often make future capital markets activity difficult to predict.
As 2019 approaches, new developments will require lenders and borrowers to get creative about how they finance properties in cities across the U.S. CRE professionals are feeling the pressure to get smart about what’s happening in the market.
How up-to-date are you on the current capital markets landscape? Take this quiz to find out.
1
What foreign country has invested the most money in U.S. commercial real estate over the past year?
YOU'RE CORRECT!
With roughly $19.6B in assets as of June 2018, America's northern neighbor was the most active buyer of commercial real estate in the U.S. as of August, Real Capital Analytics reported. Canada was also the No. 1 source of capital in 2017. This year, Canada beat Singapore, which came in second with just over $9B in U.S. investment. France followed close behind with $8.7B. All three countries finished ahead of China, which topped the list in 2016, but took a modest fourth place this year after announcing it would crack down on cross-border investment activity.
YOU'RE WRONG!
With roughly $19.6B in assets as of June 2018, America's northern neighbor was the most active buyer of commercial real estate in the U.S. as of August, Real Capital Analytics reported. Canada was also the No. 1 source of capital in 2017. This year, Canada beat Singapore, which came in second with just over $9B in U.S. investment. France followed close behind with $8.7B. All three countries finished ahead of China, which topped the list in 2016, but took a modest fourth place this year after announcing it would crack down on cross-border investment activity.
2
What percentage of the national mortgage volume is held by depository institutions and banks?
YOU'RE CORRECT!
The current capital markets landscape has been kind to traditional lenders and banks. Depository institutions hold $4.8 trillion of the nation's approximately $15 trillion in mortgage volume. Bank equity is rising, fueled by post-financial crisis recovery support from the Federal Reserve and the Treasury. In 2018, the FDIC reported a net operating income of $56B among banks, a new record high thanks in part to the Tax Cuts and Jobs Act, which proposed lower tax rates for banks. As of mid-August, the Dow Jones Bank Index showed it had exceeded its annualized return over the past five years, Urban Land Institute reported.
YOU'RE WRONG!
The current capital markets landscape has been kind to traditional lenders and banks. Depository institutions hold $4.8 trillion of the nation's approximately $15 trillion in mortgage volume. Bank equity is rising, fueled by post-financial crisis recovery support from the Federal Reserve and the Treasury. In 2018, the FDIC reported a net operating income of $56B among banks, a new record high thanks in part to the Tax Cuts and Jobs Act, which proposed lower tax rates for banks. As of mid-August, the Dow Jones Bank Index showed it had exceeded its annualized return over the past five years, Urban Land Institute reported.
3
Which asset class has received the most funding from institutional investors?
YOU'RE CORRECT!
From a total investment standpoint, office has surpassed every other asset class over the last few years. Office investments totaled $208.8B as of September 2018. Despite the rise of remote work, coworking trends and space as a service, traditional office investment remains strong, especially in suburban markets.
Multifamily investment has also proven strong in 2018, with $135.4B in assets.
YOU'RE WRONG!
From a total investment standpoint, office has surpassed every other asset class over the last few years. Office investments totaled $208.8B as of September 2018. Despite the rise of remote work, coworking trends and space as a service, traditional office investment remains strong, especially in suburban markets.
Multifamily investment has also proven strong in 2018, with $135.4B in assets.
4
Which market should investors and lenders be watching in 2019?
YOU'RE CORRECT!
Cities in the northeast United States are expected to fare well in 2019. Brooklyn neighborhoods, from Greenpoint to Sunset Park, continue to attract renters. The growth of e-commerce has driven demand for industrial space, and Brooklyn offers an opportunity to provide space where Manhattan cannot. Industrial assets in neighborhoods like Gowanus and Red Hook have become more popular as demand for space increases. Meanwhile, Manhattan continues to be a strong market for the multifamily, retail, office and hospitality sectors. Further north, Boston and its suburbs continue to present a number of opportunities for development, with the population expected to surpass 700,000 by 2030.
YOU'RE WRONG!
Cities in the northeast United States are expected to fare well in 2019. Brooklyn neighborhoods, from Greenpoint to Sunset Park, continue to attract renters. The growth of e-commerce has driven demand for industrial space, and Brooklyn offers an opportunity to provide space where Manhattan cannot. Industrial assets in neighborhoods like Gowanus and Red Hook have become more popular as demand for space increases. Meanwhile, Manhattan continues to be a strong market for the multifamily, retail, office and hospitality sectors. Further north, Boston and its suburbs continue to present a number of opportunities for development, with the population expected to surpass 700,000 by 2030.
5
What does Capital One offer for commercial real estate borrowers?
Deep knowledge of each asset class
YOU'RE CORRECT!
Capital One's financing team works with internal and external stakeholders to help develop the best solutions for clients. Whether it be Fannie, Freddie, FHA or balance sheet execution, Capital One tailors its loan offerings to each client's goals and needs. As a result, the team has helped finance thousands of properties in communities across the U.S., from trophy assets in gateway markets to affordable housing developments.
This feature was produced in collaboration between Bisnow Branded Content and Capital One. Bisnow news staff was not involved in the production of this content.
YOU'RE WRONG!
Capital One's financing team works with internal and external stakeholders to help develop the best solutions for clients. Whether it be Fannie, Freddie, FHA or balance sheet execution, Capital One tailors its loan offerings to each client's goals and needs. As a result, the team has helped finance thousands of properties in communities across the U.S., from trophy assets in gateway markets to affordable housing developments.
This feature was produced in collaboration between Bisnow Branded Content and Capital One. Bisnow news staff was not involved in the production of this content.
