Blogs

  • New Migration Patterns Create Opportunities for Carriers to Expand their Book of Business 2 weeks ago

    More and more people moved out of typically high-demand states in favor of up-and-coming regions last year, according to the 2018 U.S. Migration Report by northAmerican Moving Services. This allows carriers a prime marketing opportunity to expand their book of business into new areas. The report found that last year, Illinois, California and New Jersey saw the highest net-loss of residents in 2018. Meanwhile, smaller markets, including Idaho, Arizona and South Carolina, experienced substantial growth.

    Some of this migration is owed to affordability concerns in states like California, where increases in housing prices were paired with a dip in consumer confidence. Another reason for this shift is due to a surge in first time homeowners. In November 2018, millennials overtook Generation X in its share of mortgages by value. Not only are millennials now responsible for the most mortgages, but they now also maintain the largest share of buying power in the marketplace. For carriers, this poses a new opportunity.

    Property Intelligence Supports Marketing Penetration Strategy

    Spring homebuying season may bring some relief to the housing slowdown. With the potential of an economic recession threatening insurer growth, carriers can leverage property intelligence, specifically insights into remodeling activity, to identify markets with favorable risk profiles. Remodeling activity is a sign of consumer confidence, as homeowners do not make significant investments in their property if they are in fear of losing their jobs. Overall, this information provides carriers with a competitive edge to better understand up-and-coming markets and determine how best to allocate agency resources.

    Traditional Markets Expose New Property Risks

    California experienced consecutive decreases in year-over-year maintenance activity for a majority of 2018, suggesting the state’s aggregate property risk may not be as strong as it has been in years prior – decreases in maintenance activity are highly correlated with increased property risk.

    On the other hand, Kentucky, Nevada and Kansas saw continued growth in maintenance volume last year. Maintenance activity in Nevada grew 44.91 percent in 2018 year to date while remodeling activity rose 24.99 percent in that same time period. Kentucky saw maintenance activity increase 18.45 percent year to date in 2018 and Kansas maintenance volumes jumped 40.90 percent. In these cases, carriers may have an early glimpse into an emerging market for insured homes.

    Insurers who are expanding their book of business may leverage recent maintenance and remodeling data to identify states with ideal risk profiles. Beyond simply evaluating structure improvements, BuildFax enables carriers to find value specific to their needs. Our underwriting insights shine a light on which properties, by address, meet a carrier’s eligibility requirements. For instance, BuildFax can identify the presence of a pool, fire prevention measures, security updates and more. Carriers can use these details to validate existing data, accelerate quote to bind and optimize their inspection dollars.

    To get more insight on a research-driven, validated approach to new market expansion, contact a BuildFax representative today.

    The post New Migration Patterns Create Opportunities for Carriers to Expand their Book of Business appeared first on BuildFax Property Condition.

  • The Five Largest CMBS Loans to Turn Newly Delinquent in April 2019 2 weeks ago

    Certain CMBS players might have feared that March’s delinquency rate increase was a harbinger of things to come. But much like the core of main characters in the Game of Thrones episode, “The Long Night”, the number of casualties in April’s remittance data fell short of expectations. Only 28 private-label CMBS loans totaling $584.9 million became delinquent in April. That is down from the 38 notes amassing $937.1 million that turned delinquent in March, and it helped push the CMBS Delinquency Rate six basis points lower in April. Below is our list of the five largest new delinquencies from April.

    1. Aegon Center - A Note

    The Aegon Center debt totals $103.1 million outstanding, but its $82 million A-note was the month’s largest new delinquency. Collateral for the loan is the skyscraper at 400 West Market Street in Louisville, Kentucky, which is the tallest building in the state. The property was formerly known as the Aegon Center but its name was changed in 2014.

    With the A-note transferred to special servicing in late March because of the loan’s maturity date in May 2019, the loan piece was listed as non-performing beyond maturity in April. In 2013, the loan was modified to include a bifurcation and term extension that pushed its maturity date from 2014 to 2019. The latest financials, which were taken for the first nine months of 2018, show the asset to be 72% occupied. A story from Commercial Real Estate Direct states that the office tower has been put up for sale.

    Together, the two loan pieces represent 100% of the collateral remaining behind GCCFC 2004-GG1. The B-note was also marked as non-performing last month.

     

    2. Three WestLake Park

    The second-largest loan to become delinquent last month was the $79.8 million Three Westlake Park note. The loan, which is backed by a 419,671 square-foot office in Houston’s Energy Corridor, has become 30 days delinquent.

    Readers of our daily TreppWire newsletter probably won't be surprised by this news. We noted several years ago that the property lost BP Corporation as a tenant. BP occupied almost 41% of the property's square footage at securitization. Word later emerged that ConocoPhillips, which previously occupied 58% of the space, was going to vacate upon lease expiration in February 2019. The loan went to special servicing last October. Following BP's departure, the loan’s DSCR declined from 2.31x in 2016 to 0.68x in 2017. We noted earlier this year that the borrower submitted a proposal offering either a discounted payoff or a restructuring of the debt.

    The note makes up 9.07% of the remaining collateral behind GSMS 2014-GC20 and matures in February 2024. It is the only delinquent loan behind the GC20 deal.

     

    3. Regent Portfolio (WFCM 2016-C34)

    This $69.1 million portfolio topped our January 2019 list of largest new delinquencies. The loan moved back into a non-delinquent designation in February and March, but it was listed as 30 days late again in April.

    A group of 12 medical offices and a warehouse are listed as the loan collateral, with 11 of the properties located in northern New Jersey. Servicer data reflect that the loan was less than one month delinquent for most of 2018. Watchlist commentary states that the many of the portfolio tenants pay rent after the due date, which can cause a delay in the cash management waterfall being satisfied. The most recent commentary states that the special servicer is reviewing a proposal for a “partial release of a property to help alleviate the payment issue.” Through the first nine months of 2018, the portfolio generated an aggregate DSCR (NCF) of 1.68x on an occupancy rate of 89%.

    This portfolio backs 10.1% of WFCM 2016-C34. There is also an $11.4 million slice in a separate 2016 deal backed by this collateral, and it was also 30 days delinquent in April.

     

    4. Harborplace

    In early 2018, we urged TreppWire readers to keep an eye on the $66.9 million Harborplace loan. At the time, we noted that the Urban Outfitters at Harborplace was going to close and the loan DSCR had fallen below the 1.0x threshold. The loan was transferred to servicing in February 2019 and became delinquent for the first time ever in April.

    The Harborplace loan is backed by nearly 148,404 square feet of retail space in downtown Baltimore near the Inner Harbor and Camden Yards. Remittance data reveal that the loan was sent to special servicing for an imminent monetary default, and a letter from the borrower to the master servicer indicated “an unwillingness to continue covering cash flow shortfalls.” The loan posted a DSCR (NCF) of 1.50x in 2013, but that figure declined to 1.08x in 2016 and 0.89x in 2017. DSCR later fell to 0.54x for the first nine months of 2018. Occupancy fell from an underwritten level of 95% to 71% in 2016. H&M is the largest tenant with a lease that runs until early 2022.

    The loan represents 5.05% of the remaining collateral behind UBSBB 2013-C5.

     

    5. Aspen Heights – Statesboro

    Backed by a 339-bed multifamily complex near Georgia State University, the $49.2 million Aspen Heights - Statesboro loan was the fifth-largest loan to become delinquent in April. The loan makes up 5.48% of MSBAM 2014-C17, a deal that is part of CMBX 8. 

    While the loan was sent to special servicing last month, there isn’t much color from the servicer as to why it was transferred. Financials were strong in 2017, with DSCR (NCF) coming in at 1.46x. (The loan was still in its interest-only period at the time, as its amortization terms only kicked in two months ago.) DSCR was 1.09x as of July 2018 and came in at 0.87x for the three-month period ending in October 2018. (The loan was still IO for those periods.) Occupancy remained at 82% for the last two reporting periods, which was down from 91% at underwriting. Watchlist commentary from late 2018 states that the loan’s DSCR dropped because of “unusually high operating expenses” and “fluctuating occupancy.”

    More student housing loans have been sent to special servicing in recent months. Check out Part 1 and Part 2 of our "Un-Sweet 16" blog series that ranked the 16 largest student housing loans that were in special servicing at the time of the NCAA basketball tournament.

     

    For more information on newly delinquent loans and the current rate of CMBS delinquencies, send us a note at  info@trepp.com.

    Editor's Note: The information referenced in this blog post with regards to the CMBS loans, deals, and properties is sourced from the corresponding monthly remittance reports published by the CMBS trust. The loan names are given by the issuer at securitization and may not indicate borrower or owner affiliation. The data in this post is as of the month studied and will not reflect any changes in delinquency status made afterward. 

    The information provided is based on information generally available to the public from sources believed to be reliable.

  • CMBS Week in Review: Newest Conduit Issue Prices Notably Tighter; Office Depot Shutters More Stores 2 weeks ago

    In the primary CMBS market, the $938 million WFCM 2019-C50 priced last Monday with LCF AAA spreads settling at 86 basis points over swaps. This was notably tighter than the S+98 spread level achieved on the comparative class for the previous conduit of that shelf. BBB- bonds printed at S+340. With originations by Wells, UBS, Rialto, among others, the vertical risk retention deal features the $43.5 million mortgage written against the 341,965 square-foot Crown Center Office Park in Fort Lauderdale, Florida as its largest asset.

    CMBS BWIC data provided to us by Solve Advisors indicates that the three largest bid lists (containing non-Agency paper) on the trading roster this week had an aggregate face amount of $1.86 billion. The bulk of that volume came from a $1.48 billion list that traded on Thursday consisting of conduit AAA IOs newly issued after 2017. A separate $137 million CMBS 3.0 conduit list and a $248 million mixed batch of lower-rated conduit and single-asset bonds came in for the bid on Monday and Wednesday, respectively. When agency and IO paper are excluded from the week’s activity, secondary trading reached $630 million.

    For the week, cash spread movement was relatively muted down the stack. CMBX 6/7/8/9/10/11/12 AAA spreads were generally flat across the board while BBB- spreads inched tighter by three to six basis points for series 7 through 12. The largest moves came from the CMBX 6 BBB- segment where spreads narrowed by around 21 basis points. CMBX 6 BBB- spreads logged the most gains on Friday and Monday, with spreads coming in between six and seven basis points during those two sessions alone.

    The US Labor Department showed that hiring picked up last month as a seasonally adjusted 263,000 jobs were added to the economy in April. The report also indicated that the unemployment rate dipped to a near 50-year low of 3.6% while year-over-year wage gains remained steady at 3.2%. Other major headliners for the week centered on the Fed’s decision to hold rates unchanged, Alphabet's (parent company of Google) quarterly revenue slowdown, as well as the recent drop in oil prices due to concerns of oversupply.

    Retail Round-up: Parent company Office Depot announced closures for another round of 50 store locations across its OfficeMax and Office Depot nameplates. (My San Antonio released the full store closure list). Overall, the CMBS intersection for these addresses is expected to be minimal, with the $35.9 million Midwest Shopping Center Portfolio, the $20.2 million Great Falls Marketplace, and the $10.6 million Green Bay Plaza among the list of loans that will be impacted.

     

    Top Credit Stories from the Week

    Top Tenant Downsizes at Boston-Area Office Behind 2015 Loan (WFCM 2015-C29) -  According to first-time servicer watchlist notes for the $38.2 million 150 Royall Street loan, the top tenant CB&I has downsized considerably. The loan makes up 3.37% of WFCM 2015-C29.

    Follow-up: Connecticut Shopping Center Loan May Be Approaching Resolution (CGCMT 2006-C5) - April servicer data for the $40 million Tri City Plaza loan show that the special servicer workout code has been flipped from foreclosure to discounted pay off. The change is consistent with recent special servicer comments detailing that "a discounted settlement of the loan has been conditionally approved."

    REO D.C. Office Behind 2006 Loan Could Be Overvalued (GCCFC 2006-GG7) -  The Portals I office in Washington, D.C. might be worth a lot less than expected. According to Commercial Real Estate Direct, a recent analysis by Morningstar Credit Ratings indicates the property may only be worth $110.4 million. The property was originally valued at $235 million in April 2006. 

    Sole Tenant Extends Lease at Pittsburgh Office Behind 2015 Portfolio Loan (JPMBB 2015-C32) - According to REBusiness Online, the Williams Field Services Group has signed a lease for 112,481 square feet at Park Place Corporate Center II in Pittsburgh, Pennsylvania. The property is one of two backing the $30.2 million Park Place I & II Portfolio loan which backs a CMBX 9 deal. 

    Lease Extension Inked for Single-Tenant Oklahoma Office Behind CMBX 6 (UBSBB 2012-C4) - First-time servicer watchlist notes for the $57.5 million Boeing Office Campus loan revealed that Boeing has extended its lease at the collateral for five years. This should come as a relief to investors in UBSBB 2012-C4 and those going long on CMBX 6.


    Disclaimer: The information provided is based on information generally available to the public from sources believed to be reliable. 

  • Elevated Wildfire Activity in Florida Panhandle Signifies Need for Proactive Claims Resolution 2 weeks ago

    It’s been six months since Hurricane Michael first made landfall on the Florida Panhandle and hurricane recovery is progressing at a steady rate – major repair completion is projected to be three months away. However, discussion of Michael has resurfaced as officials credit a recent uptick in wildfire activity to hurricane-downed trees strewn across the region.

    This activity is not expected to let up anytime soon. Florida Agriculture Commissioner Nikki Fried noted this is the first of many larger wildfires they expect as Florida enters its dry season. Even as rebuilding efforts following Michael wind down, it’s important for carriers to monitor the risk on their book and ensure properties are made whole again ahead of the next hurricane season.

    Florida Properties Are at Greater Risk of Fire Damage

    An early April wildfire in Bay County burned 650 acres. It was contained in 48 hours, however, Commissioner Fried argued the fire would have been much smaller if not for the effects of Hurricane Michael. Cleanup of downed trees is slow because Hurricane Michael damaged almost three million acres across north Florida and created roadblocks that hinder firefighter access.

    This creates challenges for homeowners who have been working to make their properties whole again following Hurricane Michael, especially in Bay, Calhoun and Gulf Counties. For carriers, staying on the pulse of property changes during this time is key. Recent BuildFax data suggests the most common repairs after Michael as of December 2018 were related to roof maintenance (74.75 percent). After that, 16.71 percent of repairs were to electrical systems and 4.25 percent was for storm damage. With timely insights into structure repairs, carriers can efficiently close the loop on the claims process and ensure homeowners are getting the coverage they need at renewals. From roof replacements, premium-impacting remodels, and more, BuildFax provides carriers with insight into property risk and its evolution.

    Ensure Panhandle Properties Don’t Claim Repairs More than Once

    Unfortunately, natural disasters foster increased instances of claims fraud. This is most concerning in the Panhandle due to overlapping natural disasters. Homeowners that pocket their claims payment and fail to repair their property risk increased damage ahead of hurricane season. Furthermore, as a result of elevated wildfire activity following Michael, this risk is even greater.

    To counter these instances of fraud, BuildFax’s property change insights enables carriers to not only close the loop on claims repairs, but also validate the specific repairs that were made. Last year, following an influx of claims from Hurricane Irma, one Florida carrier found that 50 percent of properties had not yet seen repairs. With detailed, validated property intelligence at their fingertips, the carrier was able to take action ahead of the next hurricane season.

    Shifting Weather Impacts Risk Across U.S.

    This isn’t the first time we’re seeing natural disasters repeatedly affect the same region. Florida is one of a few states that experiences property damage from a variety of disasters. Recent reports from the U.S. Global Change Research Program suggest that list of states is likely to grow as changes in weather patterns shift the level of risk they pose on U.S. infrastructure.

    For more information on how key property insights can help your claims team respond efficiently to customers, contact a BuildFax representative today.

    The post Elevated Wildfire Activity in Florida Panhandle Signifies Need for Proactive Claims Resolution appeared first on BuildFax Property Condition.

  • Severe Hail Storms Expose Gaps on A Carrier’s Book of Business 2 weeks ago

    Hail season has commenced, and the Midwest and Texas are already seeing a steady rise in storm activity. Forecasts indicate this region will see continued convective storms in the coming months, spiking insured losses across the region. Following several years of severe weather, carriers that closely monitor recovery activity will have the upper hand in efficiently prioritizing claims, mitigating instances of fraud and preventing premium leakage. Our very own Holly Tachovsky touched on this in a recent webinar on historical hail activity.

    Window for Hail Claims Resolution Closes After 5 Months

    In an analysis of five severe hail storms between 2016 and 2018, BuildFax found that the average timeline for recovery following a severe hail storm is 5.4 months. Unsurprisingly, roof maintenance saw the greatest increases after each storm – roof maintenance, in aggregate, rose 246.92 percent in the subsequent three months. Following roof repairs, mechanical systems saw significant increases in maintenance work.

    While roof and mechanical systems experienced the most repair work, Tachovsky indicated that a growing trend following hail storms is an overall increase in maintenance activity, which she attributes to homeowners repairing other facets of their home while the contractor is on site. In these cases, it’s particularly important that carriers ensure homeowners are properly insured in the event of premium-impacting property changes. As more systems on a property get updated, it’s likely premium-impacting changes will create blind spots on a carrier’s book of business.

    Insured Losses Will Rise Considerably After Two Consecutive Years of Hail Storms

    In cities that experienced back-to-back severe hail storms, roof maintenance activity understandably remained flat or even declined year-over-year after the second storm. Notably, the cost of roof repairs rose every year that the city experienced a hail event, even if the city had experienced a severe hail event two years in a row. This, in turn, will affect insured losses as the cost of roof repair and replacement skyrockets.

    For instance, Denver experienced a 5.19 percent increase in roof cost in 2018 after costs already rose 6.76 percent the year prior. These increases are likely a result of labor and materials shortages driving up construction and job costs in the region. Increased populations may have also contributed to a rise in insured losses. As more people move to states like Colorado and Texas to take advantage of affordable living, the insured losses from these events increases as well. Especially as insured losses continue rising in hail-prone regions, insight into property change and risk conditions enables carriers to accurately estimate claims pay out and resolution.

    For more information on how BuildFax can support claims and underwriting efficiencies amidst hail season, contact us today.

    The post Severe Hail Storms Expose Gaps on A Carrier’s Book of Business appeared first on BuildFax Property Condition.

  • Owner of Post Office Properties Forming First-of-its-Kind REIT 2 weeks ago

    Andrew Spodek, a long-time investor in properties leased to the United States Postal Service (USPS), is taking 271 such properties public through a REIT, Postal Realty Trust Inc. The Cedarhurst, New York investor is looking to raise up to $120.8 million through the company's initial public offering. It will begin with a portfolio of 271 properties spanning 871,843 square feet in 41 states. Its plan is to operate like an aggregator, buying additional properties leased to the postal service and using shares in an affiliated operating partnership as currency.

    Spodek owns interests in 190 of those properties through Nationwide Postal Management Inc., which he founded in 2004. The remaining 81 buildings are owned by members of Spodek's family. The company will also manage another 404 properties that Nationwide Postal operates on behalf of Spodek and his family. It'll have options to buy up to 255 of those.

    “Mister Postman, look and see if there's a property in your portfolio for me”

    The postal-service property business is highly fragmented; Postal Realty states that 16,383 different entities own USPS properties. The agency itself owns 8,362 properties with 192.8 million square feet and leases another 23,147 with 79 million square feet. A total of 64% of all owners own only one property each, which average just 8,626 square feet each.

    Are post offices and related properties still being used to the same degree in the digital age? The USPS delivered 56.7 billion pieces of first-class mail in 2018, which was down from 61.2 billion pieces in 2016 and 82.7 billion in 2009. However, the volume of packages it handles has increased, thanks largely to e-commerce. The USPS handled 6.2 billion packages last year, up from 5.2 billion two years earlier and 3.1 billion in 2009. So while the popularity of sending letters might have passed its peak, post offices are still being used quite heavily.

    How to Lease (and Transform) Post Office Facilities

    Leases structured with the postal service typically have five-year terms and are double-net agreements, which require the USPS to pay for utilities and maintenance as well as property taxes. Meanwhile, the properties' owners pay for insurance and costs associated with the upkeep of the roof and structure.

    Postal Realty has identified 414 properties as possible acquisition candidates and has entered into negotiations on a sizable chunk of them. The 414 properties would be valued at roughly $97.4 million. The REIT will use proceeds of the public offering to repay about $31.9 million of debt against the properties, which Spodek has personally guaranteed.

    The REIT plans to acquire properties in locations across the US that can serve as last-mile delivery centers for Amazon Inc., FedEx, and United Parcel Service (UPS). It cited research from PolitiFact that found that Amazon uses the USPS to ship about 40% of its packages.

    Delivering Returns to the Current Property Owners

    Postal Realty will target long-time owners of single properties that have retained them within their families and face a significant tax liability if they sell them. As such, it will use its operating partnership units as currency. Doing so would allow property sellers to defer any potential capital gains taxes. It would also give them a stake in Postal Realty.

    "We believe that current post office property owners are an aging demographic and have limited ability to obtain liquidity from their post office investments in a tax-efficient manner," Postal Realty said in an SEC filing. "We believe that as the only publicly-listed REIT focused on postal properties, we will be able to offer postal property owners a tax-efficient disposition and estate planning option."

    Postal Realty expects the REIT's scale will allow it to reduce the annual property expenses that small owners of similar properties face.

    "We believe the fragmented USPS-leased property market segment is underserved both from a capital and management perspective, which provides us a unique opportunity to invest in these properties on attractive terms," the REIT noted in its filing. "Our institutional quality platform is scalable and can support substantial additional growth in our portfolio without adding significant cost."

    Spodek will serve as the REIT's Chief Executive and own 29% of its shares. Jeremy Garber will serve as the REIT's President and Treasurer. Garber has been a consultant to Postal Group LLC for the past two years, and previously was the Chief Operating Officer of Burford Capital, a New York financial company that advises law. Patrick Donahoe, Postmaster General of the United States from 2010 until 2015, will serve as Postal Realty's Chairman.

     

    Disclaimer: The information provided is based on information generally available to the public from sources believed to be reliable. 

  • CMBS Delinquency Rate Falls Again; Sets New Post-Crisis Low 2 weeks ago

    It's common for hope to spring eternal in April, with MLB's opening day giving baseball fans of all stripes a reason to believe in a winning season. Plenty of folks in the Northeast US also feel their spirits lift thanks to glimpses of legitimate spring weather in April. However, CMBS investors could have certainly joined in the spring reverie as the delinquency rate resumed its downward trajectory last month. 

    The Trepp CMBS Delinquency Rate fell six basis points to 2.82% in April. That level is now the lowest delinquency reading observed since the 2008 financial crisis. April’s rate cancels out the marginal increase in delinquencies from March when the reading inched one basis point higher to 2.88%. The delinquency rate has decreased by 154 basis points year over year.

    For the second time in the last three months, the retail delinquency rate posted the greatest improvement among major property types. The retail reading shed 28 basis points to 4.62% in April, but it remains the worst performing major property sector. Hotel delinquencies are still at the lowest level of all major property types, as the lodging rate fell five basis points to 1.55% last month. The industrial delinquency rate climbed eight basis points to 2.10%.

     

    Delinquencies among CMBS 2.0+ loans jumped five basis points higher to 0.70% in April. The CMBS 2.0+ delinquency rate has only increased by 15 basis points year over year, but that reading has improved in just four of the last 12 months. The delinquency rate for CMBS 1.0 debt moved one basis point higher to 46.46% in April. Retail loans are also the worst performing sector in the CMBS 1.0 space, as that reading was 61.65% last month.

     

    Download the full April 2019 Delinquency Report to see comprehensive breakdowns for all major property types and the CMBS 1.0/2.0 vintages.

    The information provided is based on information generally available to the public from sources believed to be reliable.

  • CLO Market Round-up: Spreads Are Steady, But Have Failed to Benefit from Fixed-Income Rally 3 weeks ago

    It was another steady (or unexceptional, depending on your position) five days for the CLO market last week. Two weeks ago, issuers had reason to be optimistic after 13 new pricings were announced. But recent activity has not matched that hefty total, as just six deals were issued two weeks ago and seven pricings made the rounds during the week of April 22nd. 

    Six of the seven pricings were issued from US desks while the other deal came from Europe. The total of six US pricings was up from three during the prior week. Europe’s lone deal was down from the three issued in previously. Five of the six US pricings were new deals and one was a refi. The lone European pricing was a refi.

    Once again, the tightest AAA execution for a new US deal came in at L+133, the same level as the best execution for each of the prior five weeks. New CLO issue spreads have been remarkably steady, but steady is not exactly an endorsement. While the CMBS market and other fixed-income segments have seen spreads tighten over the last month, the CLO new issuance market has yet to join the party. The range on AAA execution for last week’s new deals ranged from L+133 to L+148, which compares to L+133 to L+151 for the prior week. The best AAA execution last week came from the CLO 31 deal, which is managed by Neuberger Berman and was arranged by Barclays.

     

    The pricing data above is from Creditflux.

    We noted above that the CLO market has not benefited from the spread contraction that has impacted other fixed-income sectors. Another segment missing from the rally has been the leveraged loan market. (That the two should be heavily correlated is clear, since leveraged loans are the fuel for the CLO market.) Bloomberg published an opinion piece last week which noted that high yield spreads have collapsed in comparison to leveraged loans. The story notes that the gap between the two is at its narrowest level in five years. Their thesis is that this has more to do with the Fed taking rate hikes off the table and investors clamoring for higher-yielding fixed-rate assets over floating-rate notes.

    The Financial Times reported that leveraged loan funds and ETFs recorded their sixth consecutive month of outflows. The move out of leveraged loans began last November and since then, more than $25 billion has been pulled from related funds and ETFs.

     

    The information provided is based on information generally available to the public from sources believed to be reliable.

  • How Would the Banking Sector Hold Up During Another Recession? 3 weeks ago

    Risk in the banking system is now at the lowest it has been in more than a decade, but if the economy sours, even moderately, banks will feel the impact. Graph 1 (below) shows that there were zero bank failures in 2018, the first full year since 2006 in which there were none. Loan delinquencies have retreated to pre-recession lows and there were only 60 banks on the FDIC’s “problem list” at year-end, the fewest since Q1 2007. With the global economy slowing and the recent inversion of the yield curve, it might be time to consider a couple of downside, “what-if” scenarios as they apply to US bank performance.

     

    For this analysis, we turn to Trepp’s T-CAST module and examine capital ratio estimates under two hypothetical downturns: the Adverse and the Severely Adverse scenarios from the CCAR/DFAST capital planning exercise that large banks perform each year(1). Trepp’s T-CAST module projects bank income and expenses, balance sheet growth, credit losses, and impacts on capital and capital ratios under multiple economic scenarios. The Severely Adverse scenario simulates the effects of a major recession, like the Great Recession of 2008-2009, while the Adverse scenario represents a more moderate recession. 

    In fairly unsurprising fashion, bank distress would be expected to increase under either of these scenarios, with a much larger increase in distress under the Severely Adverse scenario. In the Severely Adverse scenario, capital ratios for 497 banks would fall below regulatory thresholds(2) into the "undercapitalized" category. To put this in perspective, Trepp data show that 61% of banks that have failed since 2007 were undercapitalized before failing. That means undercapitalized banks are 167 times more likely fail than adequately capitalized banks.

    Most of the banks that would experience distress in the Severely Adverse scenario are smaller banks, with assets of less than $1 billion. But when viewed by aggregated total assets, the 12 banks with assets of more than $10 billion would comprise about 65% of the assets for the entire group of distressed banks.

    Even a more moderate recession would have a significant impact on banks, increasing the number of distressed banks from its current level of zero to about 180. Again, the main impacts would be on smaller institutions: 166 (or 92%) of the distressed banks in this scenario have assets of $1 billion or less.

     

    So, what are the implications for the banking sector and the broader economy? Here are a few:

    • Regulators should be carefully monitoring banks of all sizes. The Economic Growth, Regulatory Relief, and Consumer Protection Act that was passed in 2018 reduced stress testing requirements for all but the largest banks. However, regulators can and still do monitor bank performance. Regulators need to be sensitive to early warning signs, such as excessive growth or concentrations in economically sensitive loan types.
    • Regulators should also be guarding against systemic risks posed to the banking system by a potential wave of bank failures. The Deposit Insurance Fund (DIF) that guarantees individual depositors was severely strained in the previous cycle and could be depleted again if another wave of failures were to hit the banking sector. If the 497 banks that would be distressed in the Severely Adverse scenario were to fail, it could cost as much as $100 to $200 billion to resolve these institutions. Even a more modest recession could result in losses of $30 to $40 billion to the DIF.
    • Investors should be watching for negative impacts on liquidity, as well as monitoring potential distressed investment opportunities. A wave of bank distress would negatively impact bank lending volumes and liquidity. Leveraged deals – those that heavily rely on borrowed funds – could be jeopardized and asset prices could fall. For investors with large amounts of cash, distressed buying opportunities could emerge.
    • Banks themselves, or their management teams, should provide the first line of defense against distress in the banking sector. In addition to carefully assessing borrower and market risks when extending credit, banks should be fully engaged in stress testing and capital planning. These practices are as important now as ever. When the CEOs of the nation’s top banks testified before the House Finance Committee on April 10th, several of them chose to highlight their support for capital adequacy stress testing as a meaningful response to the Great Recession. They also that noted stress testing was a significant bulwark against a repeat of the wave of bank distress that was experienced in its wake.

    Click here to learn how Trepp can help your bank evaluate its capital adequacy and how it could change during adverse economic scenarios. 

    (1) The large banks (more than $100 billion in assets) reported stress testing results to regulators on April 5.

    (2) The thresholds Trepp used are for the difference between “adequate” and “under” capitalization as per regulatory guidelines.

    The information provided is based on information generally available to the public from sources believed to be reliable.

  • What NYC’s Climate Mobilization Act Means For Your Buildings 3 weeks ago

    On April 18th, the City Council passed the Climate Mobilization Act, a package of seven related bills targeting climate change. A few days later (on Earth Day), the Mayor announced a related proposal, touted as a NYC Green New Deal.

    We’ve gathered what you need to know about the most critical pieces of regulations for NYC owners and managers, especially how (and when) they’ll impact your properties.

    Click on a particular piece of legislation to learn more about that specific rule, including estimated effective dates and a link to the exact copy of the law:

    Green Roofs
    INT 0276-2018: Green Roof Requirements

    Read the new law here.

    Previously, 1032-A was passed by the council, requiring a sustainable roofing zone for work involving the “replacing of an entire existing roof deck or roof assembly.” Basically, new construction projects and buildings undergoing “certain major renovations” will have to include a sustainable roofing zone.

    With the new law, HPD will now study the potential impact of complying with this rule for different types of buildings, especially smaller properties or buildings involved in specific housing programs. Certain buildings may be able to hold off on compliance for 5 years after the effective date.

    Based on the initial pass date, this law will likely go into effect in the Fall (likely October), so stay tuned for enforcement rules. The city also passed a separate but related resolution calling on the State legislature to increase the real property tax abatement for green roof installation to $15/square foot. We’ll let you know if this makes its way through the state.


    INT 1031-A: Green Roof Systems Information

      Read the new law here.

      Based on the above rule, the Office of Alternative Energy will be required to maintain a website featuring contact information, links to details regarding green roof system installation, and other resources and materials for sustainable roofing. This effective date is 120 days from signing (as opposed to the green roof requirement itself), so the website should be active in late Summer, before the green roof requirement will be enforced.


      Energy Grades and Loans
      INT 1251: Updated Ranges for Energy Efficiency Grades

        Read the new law here.

        You may recall that Local Law 33 of 2018 will require owners of covered buildings to submit annual energy scores starting in 2020. The Benchmarking tool will be used to calculate energy efficiency scores, and the city-issued grade will be in accordance with a set range.

        As of April 18, 2019, grade ranges for all building energy efficiency scores have been adjusted, with high and low grades getting an increased range size.

        For example, a score of 85 or higher will now land a building an A grade – previously the required score for an A was 90. On the other end of the spectrum, anything lower than 55 will result in a D grade. The previous cutoff score was 20.

        The rules for F (noncompliance) and N grades (not feasible to obtain a score, or given an exemption) remain the same.

        This rule is in place now, so energy scores submitted during the first required round in 2020 will be graded using these new ranges.


        INT 1252-A: NYC Establishes PACE: A Sustainable Energy Loan Program

        Read the new law here.

        This bill establishes PACE: Property Assessed Clean Energy Program. The city will use funds (and possibly get help administering said funds from a for-profit or non-profit organization) to establish PACE, designed to distribute and manage long-term financing for energy efficiency improvements. NYC owners will be eligible for loans to finance installations for renewable energy systems and energy efficiency improvements for their buildings located within the city limits.

        Details about the loan program (eligibility, application processes, etc.) are forthcoming – we’ll post them here as soon as they’re released.


        Emission Regulation
        INT 1253: Emission Limits & The Office of Building Energy and Emissions Performance

        Read the new law here.

        This is a big one. The Council is establishing an office at the DOB to deal specifically with energy and emissions. According to the new law, the office will have several responsibilities, including:

        • Overseeing implementation of building energy and emissions performance laws and policies for existing buildings, new construction, and major renovations
        • Establishing or administering protocols for assessing annual energy use in buildings
        • Monitoring buildings’ energy use and emissions, and reviewing building emissions assessment methodologies
        • Creating an online portal for the submission of annual emission assessments from building owners
        • Auditing said submissions, as necessary
        • Determining recommended penalties for noncompliant buildings (buildings that emit higher greenhouse gases than mandated, or buildings that fail to submit reports)
        • Overseeing cross-departmental (DEP, HPD) participation and cooperation

        This is the office that would be overseeing annual emission assessments submitted by building owners, including enforcement for failure to submit assessments or for exceeding set emission levels.

        The law goes into detail on timelines for establishing rules, exactly which buildings will be required to comply with policies handled by this office (specifically, covered buildings that match LL 84 requirements, with some exceptions), and required future filings this office will oversee.

        There are several individual deadlines in the law, starting in 2023 and continuing through the 2050 plan. That said, the office itself and director in charge don’t exist yet. The DOB will likely release more information on this office, along with some details on individual reporting and submission requirements, later this year.


        Mayor de Blasio’s Green New Deal for NYC still needs legislation to specify details – especially for the mandate to cut emissions at buildings across the city by implementing retrofits. These rules are likely to be presented and passed over the next few years, so there’s no immediately required actions outside of already-passed legislation. In fact, the OneNYC-2050 Action plan outlines emission cuts legislation for covered buildings by calendar-end 2020, and small & affordable buildings by calendar-end 2021. That said, it’s not a bad idea to take stock of current emissions per building, current plans for sustainability, and areas for improvement across your portfolio – enforcement may be years away, but it’ll be here before you know it.

        Important to Remember! With every new law from the City Council, there’s a period of NYC agency rulemaking and feedback. We’ll keep you posted about proposed rules, related hearing dates, and more.  

        The post What NYC’s Climate Mobilization Act Means For Your Buildings appeared first on SiteCompli.

      • NEW Cooling Tower Requirements Coming In 2019 3 weeks ago

        INT 1149-B, passed by the Council this March (read the full text here), outlines additional requirements for cooling tower regulations, originally set back in 2015.

        Here’s what you’ll be required to do starting this Fall:

        Local Law 77 requires minimum inspection and testing once every 3 months (“during periods of the year such cooling towers are in use,” per the law). These quarterly requirements include microbe testing. Any inspections including microbe testing (performed by a qualified person) must be reported to the department within 5 days of the inspection date. Building owners are responsible for ensuring this information is sent to the DOHMH, who will in turn post it on a public-facing site. The DOHMH notes that they’ll check the accuracy of the reported dates compared to inspection dates kept in the required maintenance log. The law doesn’t state any other information (microbe presence or levels/actual inspection results) needs to be reported – just the date. Forthcoming clarifying rules from the DOHMH will say exactly what needs to be submitted to the department. That said, if the DOHMH requests the actual results for a specific building, owners will have to provide them within 5 days of the request (or receipt of the request, whichever is later).


        Separately, the DOHMH will now remind you (via email) 30 days before your annual cooling tower certification with the DOB is due. The email will include a direct link to the certification portal, so you can click and submit directly.

        The post NEW Cooling Tower Requirements Coming In 2019 appeared first on SiteCompli.

      • CMBS Week in Review: US GDP Growing Steadily; Cantor Issues First Conduit in Two Years 3 weeks ago

        Despite concerns about a partial government shutdown, slowing domestic demand, and trade tension uncertainty, overall GDP growth came in at a solid 3.2% for the first quarter of the year. That figure is up from 2.2% for the last quarter of 2018. Much of this growth was attributed to trade deficit contraction and strong inventory investment, which helped to mitigate recent weaknesses in consumer spending, business investment, and the housing market. The S&P and Nasdaq posted new all-time closing highs on Friday, as the positive GDP numbers helped offset the mixed corporate earnings from the week.  

        Following a three-week conduit issuance drought, a team from Cantor, Deutsche, and KeyBank completed the pricing of the $758 million CF 2019-CF1 offering. The deal, which marks Cantor’s first conduit issue in nearly two years, featured LCF AAA spreads that settled at S+86 and BBB- spreads that closed at S+340. (This was in line with the recent AAA spread level of S+84 for both the BANK 2019-BN17 and the $1.26 billion BMARK 2019-B10.) The deal's largest note is a $96 million piece written against the 355,217 square-foot office at 65 Broadway in Manhattan's Financial District. 

        From a weekly perspective, LCF AAA conduit spreads tightened by less than two basis points while spreads for the double-A to BBB- racks widened by up to a basis point. Spread movements for CMBX 6-12 were also relatively muted across the series; AAA spreads remained relatively flat while BBB- spreads were unchanged or moved three basis points in either direction. There was some CMBS buying in the past few days that resulted from the recent uptick in US Treasury prices.

        CMBS BWIC data provided to us by Solve Advisors reveals that the three largest bid lists (containing non-agency paper) that were brought to market had a combined aggregate face amount of about $380 million. The largest listing that circulated was a $250 million block-sized legacy bond from the GCCFC shelf. Two other lists that made the rounds on Tuesday included an $82 million batch of conduit bonds issued from 2013 to 2018 and a $43 million group of CMBS 2.0 AAA IOs. With agency and IO excluded from the week’s trading activity, overall secondary trading volume totaled $420 million.

         

        Top Credit Stories from the Week

        Georgia Student Housing Loan Behind Sent to Servicing (MSBAM 2014-C17) - The $49.2 million Aspen Heights - Statesboro loan was sent to special servicing this month as the note has become 30 days delinquent. The loan makes up 5.48% of MSBAM 2014-C17. That deal is part of CMBX 8.

        Value of Texas Mall Reduced Again; ARA Hiked (CSMC 2008-C1) - According to April remittance data, the value of REO Killeen Mall property in Killeen, Texas has been cut for the second time from its underwritten appraised value of $102.5 million.

        General Electric to Vacate Georgia Office Behind 2013 Loan (GSMS 2014-GC10) - First-time servicer watchlist notes for April revealed that the top tenant behind the $18.2 million Parkwood Plaza loan will be vacating. General Electric (GE), which is the largest tenant occupying 69.4% of the Atlanta, Georgia office, will not be renewing its lease when it ends this year. 

        Major Tenant at NH Mall Behind CMBX 7 Extends Lease (COMM 2014-CR12) - According to April watchlist comments, Burlington Coat Factory (dba Burlington) has extended its lease at the Nashua Mall in Nashua, New Hampshire through February 2029. Burlington currently occupies 70,000 square feet or 22.5% of the collateral square footage as the mall's second-largest tenant.

        Disclaimer: The information provided is based on information generally available to the public from sources believed to be reliable. 

      • Major Updates To The Violations & Building Operations Guide 3 weeks ago
        For 5 years SiteCompli has provided a resource that became revolutionary in the industry: The Violations & Building Operations Guide

        Covering the biggest trends in real estate, and helping your team stay compliant, this year’s edition includes critical details that could have a huge impact on your portfolio. From equipment inspection updates to new agency regulations, the 2019 Violations & Building Operations Guide is an essential tool to preserve your property. 

        Explore what’s new: 

        • New requirements for 5-year gas piping system inspections
        • Top tips for enforcing Standard Operating Procedures across your organization
        • OATH rules that may impact new or ongoing construction
        • The latest FDNY & HPD regulations now in effect
        • Evaluating your building operations tech stack

        1500+ of your peers have downloaded this powerful resource and they’re using it to:
        • Train their team on regulation updates
        • Enforce Standard Operating Procedures
        • Stay ahead of inspections by using the compliance checklist
        • Maintain their building equipment

        Download your copy and find out how new regulations will affect your portfolio!

        Download Your Guide

        The post Major Updates To The Violations & Building Operations Guide appeared first on SiteCompli.

      • Prepare Your Property for Every Season 1 month ago

        While you can’t control the weather, you can control how your team plans for it. As a property owner or a member of a property management team, having standard operating procedures (SOPs) in place for each season’s challenges means when weather hits, you can minimize liability and exposure to weather-related risks and damage. But how do you prepare standard operating procedures and make them visible to the entire organization? How do you avoid seasonal weather impacts on your assets?

        We’re breaking down the seasonal annual issues you may encounter below. It’s important not just to be aware of these watch-outs, but to make sure everyone on your team knows how to respond and record information in a centralized place.

        While all of these issues may not affect your properties, use this chart as a starting point and then expand based on the needs of your properties:

        • Create customized standard operating procedures for when and how to check and perform each task.
        • Identify which person, role, or team of people is responsible for implementing the SOP when a certain event happens.
        • Talk about how you’ll continually update your SOPs as roles and building best practices change. Your procedures should be standard yet adaptable to changing needs.

        A couple of hours every season of your property management team will save you thousands of dollars in damage when issues pop up. Take a look at the flowchart we’ve created below to get you started!

        (Click to view the whole image)

        The post Prepare Your Property for Every Season appeared first on SiteCompli.

      • Home Buying Season and Severe Hail Storms May Spur Increased Housing Activity: March BuildFax Housing Health Report 1 month ago

        The March BuildFax Housing Health Report (BHHR) revealed the fifth consecutive month of declines across national housing indicator. However, the report also identified a few factors that may contribute to a rise in housing maintenance over the next few months. Chief among them are spring home buying season and increased hail activity. Over the past few years, hail has caused substantial damage to roof and mechanical systems in the Midwest and Texas. Severe weather activity, which has increased in recent years, is an important gauge of property health across the U.S. – particularly during times of severe weather, structures see increased risk.

        New and Existing Housing Supply

        On a national level, single-family housing authorizations, maintenance and remodel volumes trended down for the fifth consecutive month. It’s important to monitor decreases in single-family housing authorizations, which are correlated to historical recessions. Similarly, tracking maintenance and remodel activity provides insight into the health of the existing housing stock. Existing housing spend, which increased in January and February, also fell in March, suggesting increases in spend may not be a long-lasting trend.

        New Housing Supply Activity, March 2019

        • Single-family housing authorizations decreased 8.39 percent year over year.
        • Single-family housing authorizations decreased 2.56 percent month over month.

        Existing Housing Supply Activity, March 2019

        • Existing housing maintenance volume decreased 5.07 percent year over year.
        • Existing housing remodel volume decreased 9.76 percent year over year.

        State-Level Maintenance Activity

        Even as housing activity slows, some states saw an increase in year-over-year maintenance activity in March. The highest increase was in New Mexico at 11.30 percent, followed by New York (11.07 percent), and North Carolina (7.54 percent). Increases in maintenance activity can provide a good indication of where consumer confidence is high. In New Mexico, increased demand for oil and gas in the state may have contributed to its elevated activity this month.

        Maintenance activity typically increases after severe weather seasons. North Carolina is still recovering from Hurricane Florence, which explains its increased activity. BuildFax estimates this major system maintenance will last another month or two. Meanwhile, Colorado typically sees an uptick in maintenance around hail season as residents prepare for potential summer hail damage.

        See the full analysis here.

        In-Depth: Severe Hail Storms

        BuildFax analyzed six severe hail storms over the past three years in Minnesota, Colorado and Texas. Our analysis shows that the average recovery of major systems following a hail storm lasts 5.4 months and primarily impacts a property’s mechanical system and roof. On a national level, roof maintenance increased 246.92 percent in aggregate across all six storms in the three months following the average hail storm compared to the year prior.

        For more insight on the health of the U.S. housing market and the impact of natural disasters on the housing stock, download the March 2019 report.

        The post Home Buying Season and Severe Hail Storms May Spur Increased Housing Activity: March BuildFax Housing Health Report appeared first on BuildFax Property Condition.

      • Save Even More Time With 2 New InCheck Features 1 month ago
        Do More In Less Time

        Imagine assigning work for every building across your portfolio in seconds. Now imagine that specific work assigned to the exact right people who can take care of it ASAP, no matter who’s in or out of the office.

        You don’t have to imagine anymore – 2 new InCheck features help your team get even more done, without spending extra precious time. Here are the details:

        NEW! Trigger Work For Multiple Assets or Buildings at Once

        Whether you want to perform monthly landscaping tasks at every building in your portfolio or quickly prepare your properties in a specific region for an oncoming hurricane, InCheck’s Bulk Triggering feature lets you assign the same work to multiple buildings, units, or assets at once.

        Don’t waste time with multiple communications or repeat directions – in a single click, your team’s Workflows are assigned to the right people based on their roles and locations. All you have to do is select the work you need your team to perform, and the locations or assets where you want it done.

        Combined with InCheck’s Scheduling feature, it’s easy to create ongoing routines from building to building and asset to asset. Easily ensure no single piece of equipment goes uninspected, and any mandatory tasks for all your buildings are always completed on time.

        Assign company-wide work faster than ever before, giving your team more time to get it done – and with InCheck, you know it’ll be done right.

        NEW! Teams And Roles More Flexible, So You're Even More Covered

        InCheck Teams let you assign work to a group of people, making sure it gets done even if a specific individual is out of the office or off the schedule. On the other hand, InCheck Roles let you designate specific individuals for a certain role at a building (property manager, superintendent, etc.). That way, when you bulk trigger or schedule a Task assigned to the property manager at each building, it’s automatically assigned to the right person at the right property. You don’t have to worry about assigning multiple tasks or manually connecting people to work you want done.

        Now, we’ve made Teams and Roles even more flexible. Starting this week, you can assign Teams of people to a specific Role at a property. Here’s how this works:

        • Let’s say you have two Regional Electrical Teams – groups of experts who handle electrical work across your buildings based on location.
        • You can assign the entire Eastern Regional Electrical Team as the “Electrician” role to buildings in the eastern region.
        • This way, any time work is assigned to an Electrician at these buildings, anyone who’s available on the team can pick up the work and complete it.
        • You now have multiple people who can handle specific types of work at specific buildings, making sure you’re covered without any extra manual work on your part.

         

        Your Teams can now be assigned to a specific Role at multiple properties. In our example, work assigned to the Electrician at your Team's designated properties can be handled by any team member, ensuring coverage for automatically assigned work. Let's Start Saving Time Together

        Want to set up your team for automatically assigned work? We can help you get started – reach out to us at incheck-support@sitecompli.com

        The post Save Even More Time With 2 New InCheck Features appeared first on SiteCompli.

      • PRISM Conference 2019 Expands Speaker Lineup with Influential CRE Futurists & Thought Leaders 1 month ago

        Elie Finegold and Duke Long to Discuss the Impact of Autonomous Vehicles, AI, and Other Innovations on Property Risk Management and the Real Estate World as a Whole

        ELIE FINEGOLD:

        A true visionary and pioneer of commercial real estate and …

        The post PRISM Conference 2019 Expands Speaker Lineup with Influential CRE Futurists & Thought Leaders appeared first on EDRnet.

      • ASTM Update: Revised E1527 Standard Anticipated for 2020 1 month ago

        The ASTM E50 Committee on Environmental Assessments met in Denver in early April to discuss revisions to various property due diligence standards and the creation of a new guide.  

        Updates to the E1527 standard are expected to …

        The post ASTM Update: Revised E1527 Standard Anticipated for 2020 appeared first on EDRnet.

      • MBA of New York Real Estate Summit: The Skinny on Opportunity Zones 1 month ago

        Are opportunity zones the “greatest thing since sliced bread?” or a “scam?”

        On Tuesday in Manhattan, I moderated a track at the Mortgage Bankers Association of New York’s Fifth Annual Real Estate & Lending Summit, titled Opportunity Zones: Clarity on

        The post MBA of New York Real Estate Summit: The Skinny on Opportunity Zones appeared first on EDRnet.

      • BuildFax Named 2019 HousingWire Tech100 Winner 1 month ago

        Housing Wire’s 6th annual Tech100 awards recognized BuildFax as one of the most cutting-edge tech companies in the housing sector. This marks the second year BuildFax has made the list. BuildFax first made the list in 2017. Since then, the company has almost doubled in size and grown at double-digit CAGR – a true testament to the growth and innovation happening at BuildFax.

        “BuildFax isn’t a data company, it’s a people company – when we innovate, it’s with the end customer in mind,” said BuildFax CEO Holly Tachovsky. “We’re proud that we’re not only the leading provider of property insights, but that we drive value to the customer at every level of our organization.”

        Tech100 highlights organizations that push the boundaries of innovation. Each year, HousingWire sees an increasing number of tech companies turn their attention to housing and real estate – this year, more than 300 companies were nominated for the award. What sets BuildFax apart is its breadth of data and ability to drive value in a number of housing-adjacent industries.

        Property Insurance

        Timely insights reveal the true risk on a carrier’s book of business

        BuildFax is at the forefront of innovation in the P&C insurance sector. We unlock the power of property data to foster smarter decision making across the policy lifecycle, from underwriting to claims management and beyond. We not only offer property-level insights, but also deliver a macro-view of risk – on a monthly basis, BuildFax publishes its Housing Health Report, which provides carriers with a high-level understanding of how the risks in their book of business are changing based on systemic shifts in construction activity and external factors like natural disasters.

        Hedge Funds and Investment Firms

        Key housing indicators inform bottom-up investment strategies

        Property intelligence, at both a macro- and micro-level, provide critical support to the financial sector. Hedge funds and investment firms leverage construction and remodeling trends as a lens into the greater economy. For instance, single-family housing authorizations, which BuildFax publishes days before the U.S. Census releases their figures, are highly correlated with historical recessions between 1961 and 2018. With high-quality data at their fingertips, companies can make more informed investment decisions. BuildFax’s investment solutions also assist in forecasting construction materials demand and key industry KPIs to inform bottom-up investment strategies.

        Real Estate Investment Trusts (REITs)

        Housing data shines a light on the true value of an underlying asset

        We partner with REITs to deliver timely insights into the condition of a specific property or a number of properties within a given neighborhood. BuildFax collects verified data about a structure’s roof age, major system condition and more and leverages this data to provide accurate information on the health and condition of a structure, which in turn provides insight into its inherent value. The real estate market will see one of the greatest opportunities for investing in the next couple years. It’s especially important now, compared to years prior, for active investors to validate the underlying value of a property.

        We’re honored to have been named one of the most innovative companies pushing the boundaries on real estate tech innovation. For more information about BuildFax and our product suite, contact us today.

        The post BuildFax Named 2019 HousingWire Tech100 Winner appeared first on BuildFax Property Condition.

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