Ben Carson talks Opportunity Zones, top developers riff on condos vs. rentals: Daily digest

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Secretary of Housing and Urban Development Ben Carson talks Opportunity Zones and… ants. Carson spoke at The Real Deal’s annual Showcase & Forum in Miami’s Mana Wynwood. HUD will give preference to developers and investors who build affordable housing in federal Opportunity Zones when it comes to certain grants. [TRD]

South Florida developers riff on shift from condos to rentals at TRD Miami showcase. New York developer Michael Shvo, who is making a push in Miami Beach, said he would not follow the trend, arguing that with the right site and project, the general market’s performance is irrelevant. [TRD]

Compass refutes WeWork comparison. Both companies, backed by SoftBank, were boosted by impressive valuations despite questions about profitability, and have seen a slew of executive departures. However, in hours of interviews with The Real Deal, six of Compass’ C-suite executives sought to distance the brokerage from the narrative of the troubled coworking giant. [TRD]

Scott Wadler is now managing director at Berkadia. Wadler spent over a decade at HFF, most recently as senior director of the firm’s Miami office. He handles construction financing, hospitality and residential deals throughout the Southeast. [TRD]

South Florida Q3 resi sales a mixed bag, with inventory falling. In Miami, Miami Beach and surrounding cities, sales generally rose in the third quarter, according to the newly released Elliman Reports, authored by Jonathan Miller of Miller Samuel Inc. But elsewhere in the tri-county region, sales dropped or remained stagnant. [TRD]

County Commissioner warns Miami Beach about roadblocks for Baylink transit project. The mayor of Miami Beach’s ordinance to increase the city’s control over transit projects would harm plans to build the Baylink project connecting Miami Beach to downtown Miami, Miami-Dade Commissioner Eileen Higgins warned Miami Beach officials Wednesday. [Miami Herald]

Home foreclosures are dropping

Home foreclosures are dropping

Home foreclosures dropped nearly 20% in Q3, report shows. Overall, 143,105 U.S. properties had foreclosure filings from July through September. U.S. home foreclosures dropped sharply in the third quarter, with New York City, South Florida and Los Angeles all registering declines. [TRD]

West Palm Beach’s Rosemary Square and its lender are going to court. Rosemary Square in West Palm Beach and its lender Wells Fargo are heading to a federal trial on Oct. 23. The two are in a dispute over an appraisal needed for the refinancing of a $150 million loan at the entertainment center in the heart of West Palm Beach. [Palm Beach Post]

REITs’ investments in the American mortgage market are skyrocketing

REITs’ investments in the American mortgage market are skyrocketing

Portfolios of mortgage bonds increased to $308B over past year through March

May 28, 2019 09:01AM
REITs upped their portfolios of mortgage bonds to $308 billion

REITs upped their portfolios of mortgage bonds to $308 billion (Credit: iStock)

Real estate investment trusts are betting big on the country’s mortgage market.

REITs that buy residential home loans upped their portfolios of mortgage bonds to $308 billion over the past 12 months through March, an almost 28 percent increase. This was the biggest stockpile in six years, according to the Wall Street Journal, citing data from Inside Mortgage Finance.

Most of the growth was driven by Annaly Capital Management and AGNC Investment Corp.

REITs have become an important financing source in the housing market, especially as the Federal Reserve reduces its mortgage bonds portfolio. However, some analysts are concerned that this shift is giving more mortgages to leveraged companies without much oversight. During the last downturn, some of the riskier mortgage REITs went bust.

That said, banks are not as involved in the mortgage market now as they were prior to the financial crisis. But they do provide REITs making those same investments with short-term financing.

Annaly and some of the other REITs are buying several mortgages that Fannie Mae and Freddie Mac have traditionally focused on, and this segment of the market could continue to grow if the government tries to shrink Fannie and Freddie. Both companies recently tweaked their securities to make it easier for REITs to buy them.

“If the goal is to disburse more and more risk, you have to get more investors involved,” chief economist at the Mortgage Bankers Association Michael Fratantoni told the Journal. [WSJ] – Eddie Small

Poll: one in five Americans can’t pay rent

From TRD New York: Rising rents and the growing number of people renting in the U.S. is resulting in one in five tenants struggling to pay their rent, an Apartment List poll of about 40,000 respondents found.
The poll was skewed towards higher-income users of the website who were renting high-end apartments, according to Bloomberg News. Out of the total respondents, 3.3 percent have been evicted at one point, up from 2.8 percent two years ago.
Among people earning more than $60,000 annually, 8.8 percent didn’t pay rent – in entirety – in the last three months, while the figure for people earning between $30-60,000 were at 14.8 percent, and people earning $30,000 or lower were at almost 28 percent.
[Bloomberg News] — E.K. Hudson

Source: The Real Deal Miami