Immigration's impact on housing

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Slowing immigration set to give a smaller boost to housing link

• From 2022 to 2024, immigration surged and added 700K more households than expected, boosting demand for apartments and single-family rentals. Of these, 600K were renter households, equivalent to 133% of the new multifamily units completed in an average year.

• JBREC estimates that 100K new homeowners were created from the immigration surge during this period, accounting for 10% of new single-family homes completed annually. This highlights how immigration impacted both rental and homeownership sectors.

• By 2025, immigration is expected to return to normal levels of 1.6 million annually, slowing the boost to housing demand. Future investment should focus on metro areas with high domestic migration and pent-up demand for housing.

Multifamily demand persists as advertised asking rent growth slows, reports Yardi Matrix 

• Multifamily absorption has surpassed 300,000 units in 2024 through September, reflecting strong demand even as asking rent growth slows. Occupancy remains solid at 94.8 percent year-over-year.

• The average U.S. asking rent decreased slightly by $3 in September to $1,750, showing a flat growth of 0.9 percent year-over-year. Major markets like New York City saw rent growth at 5.4 percent, while Austin posted a decline of 4.9 percent.

• Single-family rental (SFR) advertised asking rents also dipped by $3 to $2,167, with a modest 0.6 percent increase year-over-year. Kansas City and Indianapolis led in SFR rent growth, with 4.7 percent and 4.3 percent increases respectively.

The state of commercial to residential conversions link

• Office-to-residential conversions have not taken off as expected due to the high cost and complexity of transforming purpose-built commercial spaces. Often, these projects result in compromised housing compared to new purpose-built homes.

• Successful projects, like Bishop Place in Honolulu and Millennium on LaSalle in Chicago, tend to be historic buildings supported by tax credits or favorable government policies. Both projects boast high occupancy rates, with Bishop Place converting a 1992 office building into 493 apartments.

• Retail-to-residential conversions offer greater opportunities due to larger footprints and better infrastructure. Main Place Mall in Santa Ana is a prime example, undergoing a $500 million redevelopment, with up to 1,000 residences set to be delivered.

The Mormon Church, a Massive Landholder, Just Expanded Its $2B US Farmland Portfolio Across 8 States link

• The Church of Jesus Christ of Latter-day Saints has acquired 46 farms across eight states for $289 million, expanding its agricultural influence in the US. The purchase includes over 41,000 acres, with properties in Arkansas, Florida, and Nebraska.

• Farmland Partners expects to reduce its debt by $140 million and return significant gains to shareholders from this sale. They anticipate a total gain of around $50 million, or 21% above the book value of the properties.

• The church now holds over 1 million acres of farmland across the US, making it one of the nation's largest private landowners. Its Nebraska holdings alone cover 370,000 acres.

How Warren Buffett’s Son Peter Is Transforming Kingston, NY—’Buffett Bucks’ and All link

• Peter Buffett and his wife have poured $250 million into Kingston, NY, since 2011, focusing on local philanthropy, food distribution, and revitalizing historic homes. Their efforts have spurred the creation of "Buffett Bucks," a local currency supporting small businesses.

• Kingston’s median home price has skyrocketed 32% since January 2023, far outpacing national growth rates of 6% and nearby Poughkeepsie's 15%. This real estate boom is raising concerns about gentrification and the displacement of local residents.

• Despite Kingston’s real estate price hikes, Peter Buffett has acknowledged the gentrification issue, calling it a "deep injustice." His foundation, NoVo, remains committed to supporting the community, although it’s unclear how they’ll address the rising housing costs.

Manhattan office sees highest net absorption levels in decade link

• Manhattan's office market had a net absorption of 5.7 million square feet in the third quarter of 2024, the highest in a decade, reversing a loss of 292,131 square feet in the previous quarter. Year-to-date net absorption hit 2.7 million square feet.

• Leasing surged, with 21.7 million square feet of activity by September, up 31% year-over-year. Major deals include Blackstone renewing over 1 million square feet, and Christie's and Willkie Farr & Gallagher renewing significant spaces.

• Office asking rents reached $76.55 in Q3 2024, compared to $74.54 a year earlier, despite a slight vacancy rate increase from 16.4% to 17.3%. Availability and sublet rates both dropped, suggesting tighter market conditions.

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