Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Monday, 07 May 2018

Camden Eyes Up to $400Mln of Acquisitions, $300Mln of Developments This Year

Camden Property Trust would like to buy another $200 million to $400 million of apartment properties this year and start construction of another $100 million to $300 million of properties. But it knows it faces challenges. Sellers are now more willing to bring properties to market, but buyers are aggressively pursuing them. And construction cost increases are outpacing rental increases.

Commercial Real Estate Direct Staff Report

Camden Property Trust would like to buy another $200 million to $400 million of apartment properties this year and start construction of another $100 million to $300 million of properties.

But it knows it faces challenges.

For starters, interest rates are on the rise, compressing the real rate of return it would generate from its investments - all other things remaining unchanged - and it's facing stiff competition.

"The private market hasn't adjusted at all" to the higher interest rates, explained Richard Campo, the company's chief executive, who spoke on a conference call with analysts last week. "As a matter of fact, the private market has gotten more competitive," he said. "It's harder for us to sort of thread the needle on the type of properties we want."

He explained that capitalization rates - the yields that property investors expect to generate given the prices they pay - have compressed by 25 basis points over the past two to three months in its markets. That means prices have increased, which has prompted property owners to bring their assets to the sales market.

"There's plenty of properites in the marketplace," Campo said. "But there are more buyers than there are properties, for sure."

Things aren't easier on the development side, he explained, as construction costs are increasing at a faster clip than rents. "It's a complicated place in the market, given the competitive ends on both acquisitions and development."

Nonetheless, the company has managed to identify pockets of opportunity and is...





weekly-call-to-action

“The Weekly”

“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

  • Breaking mortgage, CMBS, and REIT news

  • Quarterly league tables with rankings of B-piece buyers, book runners, and lenders

  • Industry moves and changes in “The Insider“

Data Digest

 

CMBS DELINQUENCY VOLUME

dqdataFP1

 

CMBS SPECIAL SERVICING VOLUME

sschartfp

Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

cppichart FP

 

 

CMBS 2.0 Spreads

AAAspreads

Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

REITCafe

  • Challenging Retail Environment Weights on REITs
    Mixed economic news is weighing on retail markets, pushing REIT performance down in 2015. This week, the National Retail Federation announced that back-to-school spending is expected to be down 9.3% in 2015. This news came on the heels of a report from the Commerce Department stating that retail sales declined 0.3%...
     
  • US REITs Feeling Effects from Turmoil in Greece and China
    International economic forces have taken center stage this week, affecting both US stock markets and REITs. The crash in the Chinese stock market and ongoing concerns about the future of Greece in the eurozone drove markets down during the first half of the week. REITs fared better than the overall market...

  • What Does Increased Construction Mean for Apartment REITs?
    REITs so far this year have raised $17.1 billion of capital through the sale of unsecured notes, bringing the total raised over the past two and a half years to just more than $75 billion. That’s more than they raised during the previous five years. The massive volume shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark...
shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark against which most REIT’s price their bonds
warehouse-backstage