Prices moderate in Edinburgh but it is still one of top cities in Europe for growth

Knight Frank | April 03, 2019

Price growth in Edinburgh’s prime property market moderated in the first quarter of 2019, up 0.6% with political uncertainty possibly affecting the city’s real estate sector. However, prices in the prime property sector in Scotland’s capital city are still up 7.6% on an annual basis, down from 10.6% at the end of 2018, meaning it is still one of the fastest growing cities in Europe, according to the latest index from Knight Frank. Demand continues to outstrip supply in Edinburgh and this has led to rising demand for family homes which have increased in price by 9.2% year on year while the price of flats are up 5.1% year on year.

Spotlight

The benefits of including real estate in a broad investment portfolio are becoming more widely recognised as institutional investors increase allocations to ‘alternatives’ in a search for both higher yield and active ‘value add’. Rising real estate allocations mean there is a significant amount of new capital targeting the asset class. We consider the performance attributes and diversification benefits of real estate, the developments in the wider financial markets, and most importantly, a number of structural shifts, which we find are key contributing factors in driving this strong focus on the asset class.


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REAL ESTATE TECHNOLOGY

Walker & Dunlop Expands Investment Sales Platform with Veteran Multifamily Advisor

Walker & Dunlop | June 09, 2022

Walker & Dunlop, Inc. announced that it has hired Paul Darrow as Managing Director on its multifamily investment sales platform. Mr. Darrow is based in Los Angeles and is responsible for originating and executing on middle market multifamily property sales throughout Greater Los Angeles. We are excited to continue building out our experienced team in Southern California. The middle market space is a vital segment for private and institutional investors who seek opportunities up and down the price spectrum. Through the addition of Paul and his understanding of both client profiles, we expand our ability to provide best-in-class services to our clients at every price tranche." Blake Rogers,Managing Director Mr. Darrow has over 16 years of experience and has closed over $5 billion of multifamily investment sales during his career. Mr. Darrow stated, "I couldn't be more excited to join Walker & Dunlop having observed its incredible growth over such a short period. Beyond its leadership position in capital markets and investment sales, the firm's leaders have demonstrated an intriguing forward-thinking mindset through their investments in data science, valuations, and analytics. I think those investments will be a huge advantage when it comes to providing actionable insights and opportunities to our clients." Prior to joining Walker & Dunlop, Mr. Darrow served as Senior Director at Marcus & Millichap. Previously, he was Managing Director with Cushman & Wakefield. Mr. Darrow is a member of the National Multifamily Housing Council (NMHC) and the Urban Land Institute (ULI) and is a LEED certified professional. Walker & Dunlop is one of the top multifamily investment sales platforms in the United States and has seen significant growth over the past several years. In 2021, the company grew its property sales volume by 214% year over year to $19.3 billion. For information about multifamily properties available for sale via Walker & Dunlop's investment sales platform, visit our website. About Walker & Dunlop Walker & Dunlop is one of the largest providers of capital to the commercial real estate industry, enabling real estate owners and operators to bring their visions of communities — where Americans live, work, shop and play — to life. The power of our people, premier brand, and industry-leading technology make us more insightful and valuable to our clients, providing an unmatched experience every step of the way. With over 1,400 employees across every major U.S. market, Walker & Dunlop has consistently been named one of Fortune's Great Places to Work® and is committed to making the commercial real estate industry more inclusive and diverse while creating meaningful social, environmental, and economic change in our communities.

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REAL ESTATE INVESTMENT

Echo Fine Properties Announces Second Largest Sale Ever in Gulf Stream

Echo Fine Properties | June 06, 2022

Echo Fine Properties, one of the most well-known luxury real estate firms in the Palm Beach area is proud to announce the second highest sale of a home ever in Gulf Stream. The 7715-square foot home on the ocean sold for a final purchase price of 27.5 million. Gulf Stream is ranked as the eleventh highest-income place in the United States. Designed by elite architect Randall Stofft, the home has 7.5 bathrooms and 5 bedrooms and was built in 2021 with a one bedroom one bath guest house. Echo Fine Properties agent Mitch Frank was instrumental in bringing a unique buyer to the spectacular home. The Echo Fine Properties team is known for luxury sales both in Gulf Stream and other areas around South Florida. It is rare to purchase a newer home in Gulf Stream on a premium oceanfront lot. About ECHO Fine Properties ECHO Fine Properties is a luxury real estate brokerage located in Palm Beach Gardens, Fla founded by Jeff Lichtenstein. Selling more 400 million dollars of real estate, Echo is one of the busiest, most awarded and forward-thinking brokerages in all of South Florida. Named, "Best Brokerage of the Year" and "Most Connected Firm" Jeff and his 70-person team are a true one stop shop. Echo's Home ECHOnomics Guarantee is one of the most unique internal collaborations to ever hit the industry.

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MORTGAGE AND LENDING

First Street Foundation Finds Over 30.4 Million Properties Have a 1% or Greater Chance of Experiencing a Wildfire During the Course of a Mortgage

First Street Foundation | May 16, 2022

First Street Foundation released the First Street Foundation Wildfire Model, the only nationwide, probabilistic, climate adjusted, peer reviewed, property specific wildfire risk model for properties in the contiguous United States. Detailed in the 5th National Risk Assessment: Fueling the Flames, the model provides a first of its kind analysis of the risk individual properties face from damaging wildfires, and up to 30 years in the future as a result of climate changes. Nationwide, the report finds nearly 20 million properties face "Moderate" risk, (up to a 6% chance of experiencing a wildfire over 30 years); 6 million properties face "Major" risk (up to 14% risk over 30 years); nearly 3 million face "Severe" risk (up to 26% over 30 years); and approximately 1.5 million face "Extreme" risk (greater than 26% risk over 30 years). Over 49 million properties face less than 1% chance of experiencing a wildfire over a 30-year period, or "Minor" risk in the model. Wildfire has become one of the most common and dangerous climate perils, increasingly spreading from heavily forested areas to more populous urban and suburban environments. According to NOAA, damage associated with wildfires has grown substantially, with $81.7 billion, or 66% of all direct losses since 1980, occurring in the last five years. Yet today, neither the public nor private sector have developed a simple methodology or tool to help homeowners, buyers or renters understand a property's wildfire risk, and make informed decisions to protect them. Existing tools like USDA Forest Service's wildfire risk assessment are designed to help fire officials understand how risk varies across a state, region, or county; it is explicitly not meant to help homeowners understand their personal risk. To address this gap, First Street Foundation will make this critical wildfire risk information available to users for free through Risk FactorTM, where Fire FactorTM data will be presented alongside Flood Factor and other future perils, giving users a comprehensive understanding of their homes from physical climate risk today and 30 years into the future. Like Flood Factor, Fire Factor data will be integrated into Realtor.com, providing visitors to the site a property-level wildfire risk assessment in the form of a risk ranking from 1 (Minimal) to 10 (Extreme) for each property on the site. Users interested in commercial real estate can also find this data integrated with Crexi. "The lack of a property specific, climate adjusted wildfire risk for individual properties has severely hindered everyone from the federal government to your average American," said Matthew Eby, Founder and Executive Director of First Street Foundation. "As a changing climate drives more frequent and severe wildfire events, Fire Factor will prove critical in ensuring everyone has the insights they need to understand their personal risk to avoid and protect against the devastating impact of a wildfire." According to a recent Realtor.com survey, seven out of ten recent homebuyers considered the risk of natural disasters when deciding where to live. Realtor.com is adding Fire Factor to maps and properties to help home shoppers and homeowners make informed decisions. Wildfire risk information empowers consumers to protect their homes against the increasing threat of wildfire damage." Sara Brinton, Lead Product Manager, Realtor.com Building the model brought together top climate and data scientists, technologists, and modelers from other leading organizations; the Spatial Informatics Group, Reax Engineering, and Eagle Rock Analytics who are members of the Pyregrence Consortium as well as the USGS, and architectural design & engineering consulting group Arup. This group combined decades of peer reviewed research and expertise in next-generation modeling techniques to create an open source, freely available wildfire model that accounts for current and future climate conditions.

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REAL ESTATE TECHNOLOGY

Innovative Industrial Properties Acquires Massachusetts Property and Enters Into Long-Term Lease with TILT

Innovative Industrial Properties | May 17, 2022

Innovative Industrial Properties, Inc. (IIP), the first and only real estate company on the New York Stock Exchange focused on the regulated U.S. cannabis industry, announced that it closed on the acquisition of a property comprising approximately 104,000 square feet of industrial space in Taunton, Massachusetts. The purchase price for the property was $40.0 million (approximately $384 per square foot), which is fully built out and operational as a regulated cannabis cultivation, processing and dispensing facility. Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease agreement for the property with a subsidiary of TILT Holdings Inc. (TILT). TILT was a tenant of the prior owner of the property, and executed a purchase agreement with the prior owner to acquire the property for $13.0 million (approximately $125 per square foot). In addition, during TILT’s tenancy with the prior owner, TILT invested in excess of $27.0 million (approximately $260 per square foot) of its own funds in improvements to the building. IIP’s investment of $40.0 million consists of the original purchase price for the approximately 12-acre site and standard industrial building to the prior owner and a portion of the costs invested in the building by TILT for buildout of the facility, which included the HVAC, electrical, plumbing, cultivation, extraction and processing room buildouts and other building systems infrastructure necessary to support regulated cannabis cultivation and processing. The property consists of approximately 60,000 square feet of cultivation space, 8,000 square feet of production space (including a full commercial kitchen and extraction facility), 2,400 square feet of retail space and mechanical, office, administrative and storage space. The property currently produces a wide variety of form factors, both in-house and with third-party branded partners, including packaged and pre-rolled flower, concentrates, edibles and vaporizers. As the pioneering real estate investment trust (REIT) for the regulated cannabis industry, IIP partners with experienced, regulated cannabis operators and serves as a source of capital by acquiring and leasing back their real estate assets, in addition to offering other creative real estate-based capital solutions. TILT is a vertically integrated enterprise with a portfolio of companies focused on inhalation technology and regulated cannabis operations, and in 2021 generated approximately $203 million in revenues. Jupiter Research LLC, a wholly-owned subsidiary of TILT and leader in the vaporization segment, focuses on hardware design, research, development and manufacturing with customers across the United States, as well as Canada, Israel, Mexico, South America and the European Union. TILT also conducts regulated cannabis operations in Massachusetts, Pennsylvania, Ohio and New York (through its partnership with the Shinnecock Indian Nation). TILT owns a vertically integrated license in Massachusetts, with its Taunton facility dually licensed for both medical and adult-use cultivation, product manufacturing and retail. In addition to the Taunton facility, TILT operates a dispensary in Brockton that is licensed for both medical and adult-use cannabis, and expects regulatory approval soon for an additional medical-use dispensary in the city of Cambridge. TILT’s products recently were awarded first-place gold in “solvent concentrates” and second-place silver in the “edibles category” at the 2022 NECANN Canna Competition in Boston. According to the Massachusetts Cannabis Control Commission, 2021 regulated cannabis sales in Massachusetts were approximately $1.6 billion. Including this property, IIP owns nine properties in Massachusetts, comprising approximately 879,000 rentable square feet (including square footage under redevelopment) and representing a total investment, including commitments to fund future improvements, of approximately $282.7 million (approximately $322 per square foot). As of May 16, 2022, IIP owned 110 properties located in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Dakota, Ohio, Pennsylvania, Texas, Virginia and Washington, representing a total of approximately 8.2 million rentable square feet (including approximately 2.4 million rentable square feet under development / redevelopment). As of May 16, 2022, IIP had committed approximately $2.2 billion across its portfolio, including capital invested to date (excluding transaction costs) and additional capital commitments to fund future construction and improvements at IIP’s properties. These statistics do not include an $18.5 million loan from IIP to a developer for construction of a regulated cannabis cultivation and processing facility in California and up to $55.0 million that may be funded between June 15, 2022 and July 31, 2022 pursuant to IIP’s lease with a tenant at one of IIP’s Pennsylvania properties, as the tenant at that property may not elect to have IIP disburse those funds and pay IIP the corresponding base rent on those funds. About Innovative Industrial Properties Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated cannabis facilities. Innovative Industrial Properties, Inc. has elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017.

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Spotlight

The benefits of including real estate in a broad investment portfolio are becoming more widely recognised as institutional investors increase allocations to ‘alternatives’ in a search for both higher yield and active ‘value add’. Rising real estate allocations mean there is a significant amount of new capital targeting the asset class. We consider the performance attributes and diversification benefits of real estate, the developments in the wider financial markets, and most importantly, a number of structural shifts, which we find are key contributing factors in driving this strong focus on the asset class.

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