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Mogul Minute 06/10/2016

Mogul Minute 

Here at, we keep our finger on the pulse of all things real estate, from finance to technology and everything in between. We make a point of sharing interesting articles and think pieces among staff to help our team stay abreast of the market, and ahead of the curve.

So we thought, why not share some of these insights with you, our partners?

Got a Minute? Here’s some recommended reading with key points from the content:

CMBS Surveillance: Maturity Report – May 2016 (Morningstar)

  • Very bad news for the CMBS market as the payoff rate dropped to its lowest level in more than two years. The rate dropped 17% over the past month going from 82% to 65% in May.
  • Morningstar expects the payoff rate to drop even further as Sponsors are having trouble paying the overleveraged loans that were originated during the peak and featured loose underwriting with aggressive rent projections, low cap rates, and high LTVs.
  • The “Matured and Delinquent” category also nearly doubled April’s total for the month going from 11.7% to 21% in May. The only silver lining is the percentage of loans liquidated (8.4%) is the most during any month in 2016. A chart showing the CMBS loan breakdown for May:

REITS are Selling and Building, Not Buying (Trepp Talk)

  • Given the current market conditions of low interest rates, plentiful capital, and rich property valuations, most REITS are net sellers at this phase in the cycle. REITs are using proceeds from sales to pay down debt, buyback shares, and fund ongoing development and redevelopment activity.
  • Value-add opportunities are among the acquisitions which still interest REITs. They are also finding other creative ways to get value by buying out joint venture interests. Development also has been a major focus given the pricing on existing assets
  • Some REITs have voiced that concerns of oversupply are overblown as construction levels are either at or below the long-term historical norms, though they have acknowledged there is some softness in certain product types in some markets.

Get Real: Billions Set to Pour Into Real Estate Investments (ABC News)

  • An article contemplating the impact of the upcoming changes as Real Estate will become its own sector in the S&P. Currently, real estate is part of the financial sector and estimates vary wildly on the impact ranging from $10 billion to 10 times that.

Walmart Grocery Delivery Via Uber, Lyft in Testing Stages (Bisnow)

  • Limited two-week test in Phoenix, San Jose, and Denver where Walmart shoppers can have groceries delivered to them by Uber or Lyft. The delivery fee is $7-$10.

These five areas of the U.S. are adding jobs faster than anywhere else (Marketwatch)

  • Williamson county, TN – 2.7% unemployment rate. The lowest tax rate of any county in TN and no income tax. Mars, Verizon, and Nissan have large operations there.
  • Utah county, UT – 3.2%. BYU attracts a lot of tech jobs and there has been a lot of buzz about the number of tech companies that are moving/being created there.
  • Loudoun county, VA – 2.7%. Straddles Washington DC and has a high concentration of federal government and national defense employees. The area has also attracted a lot of tech and communications companies recently.
  • Chesterfield, VA – 3.2% - The county has aggressively sought new businesses with low taxes and other firms of indirect assistance. Amazon, Wal-Mart, and UPS have presences here. The Pentagon is also another major job provider here.
  • Lee County, FL – 4.1% - Rising population and new business development has construction surging. Lack of income tax, low corporate tax rates, and low regulation contribute to the strong labor market.


Written by Tim Ednoff, Associate at

Tim evaluates investment opportunities as well as performs due diligence and writes content for various equity and debt transactions. Outside of the office, Tim is an avid sneaker collector, a passionate health and fitness advocate, and a dedicated podcast enthusiast.

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