Market Update: Q2 2016

Ivan KaufmanMarket UpdateQ2 2016

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Ivan Kaufman - Market Update Q2 2016

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

YTD1

6

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

US CMBS Issuance

Source: Arbor, Commercial Mortgage Alert, Trepp

CMBS IssuanceUnited States, All Property Types, Billions

Through June 2016, CMBS issuance totaled $30.7 billion, an annual pace of $61.4 billion, and 44% below the $54.5 billion volume completed through the first six months of last year. At the start of the year, issuance for 2016 was estimated to reach $100 billion, although now those estimates have been cut substantially. For all of 2015, a total of $101.0 billion of CMBS was issued.


2016 2017 2018 2019 2020$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

Volume ($, Billions)

Source: Arbor, Real Capital Analytics

Total US CMBS Upcoming Loan MaturitiesBillions of Dollars, As Of May 2016




Source: Arbor, Board of Governors of the Federal Reserve System, ICE Benchmark Administration

Selected Interest Rates

The Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.

Monthly, Not Seasonally Adjusted

Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-160.0%

2.0%

4.0%

6.0%

8.0%

10.0%

U.S. Recession 10-Year Treasury 30-Year Mortgage Rate Federal Funds Rate LIBOR 1-Month U.S. Dollar



The average asking rent in the U.S. reached $1,252/unit at the end of the second quarter, a 4.1% increase over the $1,203/unit average reported one year ago and the 27th consecutive quarter of growth. The vacancy rate finished the quarter at 4.5%, up from 4.2% one year ago, and the highest rate in three years.

Source: Arbor, Reis

Average Asking Rent and VacancyUnited States, Multifamily

2001

2002

2003

2004

2005

2006

2007

2008

2009

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

$800

$900

$1,000

$1,100

$1,200

$1,300

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Asking Rent ($/Unit) Vacancy (%)



Foreign Investment in U.S. Multifamily PropertiesVolume, Billions of U.S. Dollars

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

*

YTD1

6

$0.0

$4.4

$8.8

$13.2

$17.6

$22.0

Source: Arbor, Real Capital Analytics

* Includes $5.4 billion purchase of Peter Cooper Village & Stuyvesant Town



U.S. Recession

Source: Arbor, U.S. Bureau of Labor Statistics

Employment Growth

Total nonfarm payroll employment in the U.S. increased by 287,000 jobs in June. The largest gains were measured in leisure and hospitality, health care and social assistance, and financial activities sectors. Employment also increased in information, mostly reflecting the return of workers from the Verizon strike.

United States, All Employees, Total Nonfarm, Seasonally Adjusted

Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16-900.0

-600.0

-300.0

0.0

300.0

600.0

Monthly Change 12-Month Moving Average


Ivan Kaufman - Market Update Q2 2016Ap

r-33

to

Apr-

37

Jul-3

8 to

Ja

n-45

Nov-

45 to

O

ct-4

8

Nov-

49 to

Ju

n-53

Jun-

54 to

Ju

l-57

May

-58

to

Mar

-60

Mar

-61

to

Nov-

69

Dec-

70 to

O

ct-7

3

Apr-

75 to

De

c-79

Aug-

80 to

Ju

n-81

Dec-

82 to

Ju

n-90

Apr-

91 to

Fe

b-01

Dec-

01 to

No

v-07

Jul-0

9 to

Cu

rren

t

0

25

50

75

100

125

150

Time Between Recessions (Months) Average

Source: Arbor, Federal Reserve Bank of St. Louis, National Bureau of Economic Research

Time Between Recessions (1933 to Current)NBER based Recession Indicators for the United States from the Peak through the Trough, Monthly, Not Seasonally Adjusted

Longest Time Between Recessions (Apr-91 to Feb-01): 119 mo.Average Time Between Recessions: 60 mo.Time Since Previous Recession: 84 mo.

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About Us

Founded by Chairman and CEO Ivan Kaufman, Arbor, LLC and Arbor Commercial Funding, LLC are national direct lenders specializing in loan origination and servicing for multifamily, seniors housing, healthcare and other diverse commercial real estate assets. Arbor is a 2013 Top 10 Fannie Mae DUS® Multifamily Lender by volume, a Freddie Mac Program Plus® Seller/Servicer and Small Balance Loan lender, an FHA Multifamily Accelerated Processing (MAP)/LEAN Lender, a HUD-approved LIHTC Lender as well as a CMBS, Bridge and Mezzanine lender, consistently building on its reputation for service, quality and flexibility. With a current servicing portfolio of more than $11 billion, Arbor is a primary commercial loan servicer and special servicer rated by Standard & Poor’s and holds an Above Average rating from Standard & Poor’s. Arbor is also on the Standard & Poor’s Select Servicer List and is a primary commercial loan servicer and loan level special servicer rated by Fitch Ratings.

Arbor, LLC also manages Arbor Realty Trust, a real estate investment trust, (REIT), formed to invest in mortgage-related securities, real estate-related bridge, junior participating interests in first mortgages, mezzanine loans, preferred and direct equity investments and in limited cases, discounted mortgage notes and other real estate related assets. Arbor is headquartered in Uniondale, NY, with full-service lending offices throughout the United States. For more information about Arbor, visit www.arbor.com.

The research contained in this report should not be construed as a solicitation to and/or trade. All opinions, news, research, analyses, prices or other information is provided as general market commentary and not as investment advice; all information is subject to change. Arbor, its members, shareholders, employees, agents and representatives do not warrant the completeness, accuracy or timeliness of the information supplied, and shall not be liable for any loss or damages, consequential or otherwise, which may arise from the use or reliance on the content contained herein. Past performance is not indicative of future performance.

Market Update: Q2 2016

Real Estate

Transcript of Market Update: Q2 2016