Red Oak Capital Group, LLC

08/02/2024

The total cumulative U.S. commercial property distress rose to $94.2 billion in the second quarter of 2024, up $2.0 billion from the previous quarter, with $10.6 billion in new distress and $8.6 billion resolved, highlighting ongoing challenges in and sectors, while also presenting investment opportunities in distressed assets and prompting cautious strategies.

Check out the GlobeSt article for more insight.

07/26/2024

Bisnow recently published an article discussing the ways in which are finding cash in creative places to make deals work, while are responding cautiously, carefully vetting deals to avoid risk. Red Oak's Paul Cleary shared his insight in the article, adding that many looking to build in Miami offer overly rosy projections, considering the market's stagnant rents and heavy competition.

Visit the link below for more insight:

Investors are wading through overly optimistic financial projections from developers to find the few deals that work in today's market.

07/19/2024

According to a report from RentCafe, approximately 12.7K new apartments entered the market in 2023 via . Furthermore, a staggering 151K apartments are in various stages of conversion across the country, with 58K units repurposed from former offices.

The Red Oak team has witnessed the success of adaptive reuse innovations through our involvement in the highly anticipated $179M Laura Street Trio historic redevelopment project, which has been hailed as a major part of Downtown Jacksonville's .

Adaptive reuse apartments grew by 17.6% in 2023, with hotel conversions taking over offices. Another 151K units are underway nationwide.

07/18/2024

A surge in construction pushed U.S. housing starts up 3% in June to a seasonally adjusted annual rate of 1.35 million units, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau said this earlier this week. New construction in the multifamily sector rose 19.6%, while single-family starts were down 2.2% for the month.

The rise in multifamily construction could lead to more financing opportunities for lenders specializing in and permanent financing for multifamily properties.

More insight from Connect Commercial Real Estate below:

A surge in multifamily construction pushed U.S. housing starts up 3% in June to a seasonally adjusted annual rate of 1.35 million units, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau said Wednesday. New construction in the volatile multifamily sector rose 19.6%, whi...

07/12/2024

The lack of housing is underscored by surging rent growth across the nation, especially in the last few years. While rent continues to climb, wages have not. In fact, rent growth has outpaced wage growth in 44 out of the 50 largest United States metros since 2020, according to data from Zillow and StreetEasy.® At Red Oak, we are passionate about socially responsible lending. One of our initiatives is to lend to sponsors who focus on delivering affordable housing to meet the soaring demand in markets across the country.

Since the pandemic, rent growth has far outpaced wage growth in 44 out of the 50 largest United States metro areas, with New York City having the largest gap.

07/04/2024

Happy 4th of July from the Red Oak team! Today, we celebrate the spirit of freedom and unity that defines our nation. Have a safe holiday.

06/28/2024

In a recent Q&A interview with Private Debt Investor, Churchill Asset Management’s Jason Strife and Mat Linnett discuss why platform deal volumes may still be down while portfolio-based activity is keeping lenders busy.

Our team shares the sentiment that the broader economic factors and market dynamics have contributed to this shift. We believe that the underlying fundamentals of , particularly outside the older, urban office properties, remain strong.

Platform deal volumes may still be down, but portfolio-based activity is keeping lenders busy, say Churchill Asset Management’s Jason Strife and Mat Linett

06/21/2024

Connect Commercial Real Estate recapped their recent Midwest Multifamily conference in Chicago, which includes insights from Red Oak's Stratos Athanassiades. He shared that we see a lot of individual investors in secondary markets looking to add value, buying a property, fixing it up, whether it’s just the units or a whole gut rehab job on it.

For the full video recap, see the link below:

Tackling the challenges in the current market and identifying opportunities were front and center at the recent Connect Midwest Multifamily event in Chicago.

06/20/2024

The LightBox Monthly CRE Activity Index showed a modest improvement in May 2024, marking the third consecutive month of increased activity. The Index, which tracks daily transactions, rose 2% from April to 91.1, reflecting the highest levels since June 2023. Despite a lack of anticipated interest rate cuts by the Federal Reserve, the market is showing signs of steady recovery, driven by increased deal-making activities across various CRE sectors.

The early 2024 interest rate cut hinted at by the Fed at its meeting last December has yet to materialize. In fact, coming out of this week’s FOMC ...

06/14/2024

Commercial and borrowing started slowly in 2024, similar to last year, with the exception of a significant boost in loans for industrial properties. According to the Mortgage Bankers Association, loan originations varied across different property types in the first quarter. Industrial properties saw a 63% increase in loan volume, and hotel property originations rose by 8%.

For , this indicates a selective recovery with strong investor interest in industrial properties, likely driven by ongoing demand for logistics and warehousing space.

Hotel Originations Also Buck Trend With 8% Increase

06/14/2024

A recent study from Bloomberg sheds light on a concerning trend: large US banks' exposure to is substantially greater when considering the debt of , which poses additional systemic risks. Led by researchers like Viral Acharya from New York University, the study reveals that when factoring in term loans and credit lines extended to REITs, big banks' CRE lending risk increases by approximately 40%. Surprisingly, this indirect exposure has largely escaped scrutiny in traditional risk assessments.

Large US banks may be more exposed to commercial property than regulators appreciate because of credit lines and term loans they provide to real estate investment trusts, according to a new study.