Category: Real Estate
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How Institutional LPs are Grading Multi Family Acquisition vs. Development with an Untrended Yield on Cost Target
21st November 2024 | by the Investment Grade Team
The multifamily real estate sector is witnessing a cautious resurgence of equity investment activity. Institutional Limited Partners (LPs) are gradually reopening their coffers for ground-up developments, signaling a renewed interest in fueling growth within this asset class. However, developers face a pivotal challenge: identifying projects where construction costs are significantly lower than acquisition costs. In…
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Impact of Interest Rate Cuts on Real Estate Cap Rates
21st November 2024 | by the Investment Grade Team
With the Federal Reserve implementing interest rate cuts, the real estate market is poised to see notable shifts in cap rates, particularly as long-term yields like the 10-year Treasury yield directly influence real estate investments. Cap rates, which represent the yield of a property based on its net operating income (NOI) and current market value,…
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The Opportunity with $1 Trillion in CRE Loans Coming Due
21st November 2024 | by the Investment Grade Team
The CRE Lending Opportunity: Partnering with a Dynamic Marketplace As U.S. banks face a reckoning over the next two years, more than $1 trillion in commercial real estate (CRE) loans will come due, according to calculations by The Conference Board using MSCI Real Assets data. This impending wave of loan maturities presents a unique opportunity…
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Grading Vacancy Rate Assumptions in Multifamily Syndication Investments
21st November 2024 | by the Investment Grade Team
Real estate investment through multifamily syndications has increasingly become a preferred channel for investors seeking both stable returns and significant growth potential. This investment model pools resources from multiple investors to acquire properties that individual investors might not be able to purchase outright. The success of these investments heavily relies on accurate underwriting and analysis,…
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Investment Grade Security Token Offerings
21st November 2024 | by the Investment Grade Team
Investment Grade Security Token Offerings: The Future of Real Estate Syndications. In today’s real estate market, investors face a myriad of challenges, primarily characterized by lack of liquidity and limited access for smaller investors. Traditional real estate investments often require substantial capital upfront, locking out individual investors who might not have significant financial resources but…
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How to Grade IRR on Real Estate Investments Syndications & Funds
21st November 2024 | by the Investment Grade Team
Investing is a journey filled with numbers, forecasts, and the pursuit of making your money work for you. Among the various metrics that gauge the success of an investment, the Internal Rate of Return (IRR) stands out for its ability to tell a story beyond the basic return on investment (ROI). It’s not just about…
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Investment Grade Definitions
21st November 2024 | by the Investment Grade Team
“Investment Grade” refers to the quality and stability of various investment vehicles, indicating low to moderate risk and a strong likelihood of fulfilling financial obligations. Originating from credit ratings, where bonds rated “BBB” (S&P) or “Baa” (Moody’s) and above signify solid fundamentals and reliable interest and principal payments, the term has broadened to encompass a…
