How Financial Markets Impact Property Values

By Stan Sonenshine in Real Estate Investing

8 years ago

8 years ago 1 1 2887

Until the early 1980’s, real estate values were dependent on what I call real estate fundamentals—location, product quality, supply and demand. As a rule, financing provided investors and developers inexpensive, long-term capital but had insignificant impact on property value. Therefore, they held properties for long periods of time and often made money by paying down debt and by appreciating property values. Developers and owners had banking relationships as well. All of these factors equaled stable markets (except when developers became aggressive and tilted the supply/demand balance). Those were the Good Ole’ Days. Now, financial markets have a greater impact on property values, and here’s why: A shift in how private interest buys, develops and finances properties occurred. The Internet has made real estate a global asset. Traditional financing is not as readily available. 1980’s: A Marked Shift The 1980’s forced a major shift in real estate development and investment. Due

How Public-Private Relationships in Real Estate Development Are Growing

By Stan Sonenshine in Real Estate Development

8 years ago

8 years ago 0 0 2883

My previous blog post considered why public-private relationships in real estate development are being more widely utilized and are creating more investment opportunities. Let’s continue that discussion… THE WHY Here’s a quick recap of why I think this is happening: Emergence of high density-mixed use product Growing project size Need for public financing (both for community impact developments and supporting infrastructure) While the public sector has become more involved in the actual developments, it also has offered financial incentives to private interest to encourage certain types of developments in certain places. I’ll call these THE WHAT Community improvement districts (CIDs) Tax allocation districts (TADs) Special public interest districts (SPIs) Opportunity Zones Bond financing Community Improvement Districts (CIDs) In Community Improvement Districts (CIDs), jurisdictions allow businesses in established districts to self-tax in order to make internal improvements. Often property owners pay a fee to participate in the district, and district members,

The PUBLIC-Private Relationship in Real Estate Development

8 years ago

8 years ago 0 0 3706

Zoning and Permitting. Eminent Domain. In the past, that was about the extent of local jurisdictions’ involvement in private development. But my how times have changed. THE WHY There are three main reasons the public involvement in public-private relationship is growing: (1) the emergence of high density-mixed use product; (2) project size; and (3) the need for public financing. Zoning Changes Traditionally, developers would buy the land or property and do whatever they wanted. Government or public involvement in the process was limited to zoning and variance permitting, and, in some cases, exercising its right of eminent domain and contribution to infrastructure. Historically, zoning districts were restricted to one type of use (i.e. office or industrial).There was very little mixed use product. With rare exception, zoning did not take into account putting all uses up in the same place and at the same time. If changes were required, public hearings

Atlanta’s Edge Cities Develop New City Centers

By Stan Sonenshine in Real Estate Development

8 years ago

8 years ago 0 2 9479

I recently heard famed urbanist Richard Florida speak about the rise of the creative class. He claims creative people want to be around other creative people—to live closer together, to spend less time in their cars and to partake in convenient amenities. This trend is manifesting itself in urban areas in the form of high-density, mixed-use developments. It is also happening in the suburbs of metropolitan areas, which have grown up around what were once fairly rural downtowns. In the Atlanta metropolitan area, several edge cities are working hard to create an attractive “sense of place”. Also, several suburban communities have incorporated to take advantage of this trend. Let’s look at a few examples in Atlanta. Living on the Edge You probably already know their names. Dunwoody, Sandy Springs, Roswell and Alpharetta all rank as Atlanta’s edge cities. Let’s start with Sandy Springs as I have been a resident there

How Financial Markets Impact Property Values

How Public-Private Relationships in Real Estate Development Are Growing

The PUBLIC-Private Relationship in Real Estate Development

Atlanta’s Edge Cities Develop New City Centers

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