A report from Bloomberg. "Real estate developers who can’t get funding from JPMorgan Chase & Co.’s commercial bank may have another option: a JPMorgan trading desk. A group of traders in JPMorgan’s investment bank has expanded from selling commercial mortgage-backed securities to underwriting loans that are unsuitable for bonds, such as those for big construction projects, according to people with knowledge of the matter. In recent months, the desk has helped fund developments including Manhattan condominiums, a Times Square hotel and New Jersey’s troubled American Dream mega-mall."

"The biggest U.S. bank by assets is making the deals as traditional lenders pull back from construction loans, which carry bigger risks and juicier yields than mortgages for occupied buildings. Traders in JPMorgan’s investment bank are harnessing demand from investors and developers to take part in potentially lucrative projects, even as the company’s commercial bank -- which holds most of its real estate debt -- signals caution about riskier property financing after a six-year surge in prices."

"'They’re lending into a higher-risk area when we’re clearly at an inflection point in the cycle,' said Mark Williams, a former Federal Reserve examiner who lectures on financial risk management at Boston University, and didn’t have specific knowledge of the loans."

The Houston Chronicle in Texas. "Several large real estate loans backed by Houston office buildings with vacant space and exposure to the volatile energy industry have the potential to default, according to a recent report from a ratings agency Morningstar Credit Ratings. Morningstar's November 'Watchlist' report includes loans held in commercial-backed mortgage securities with an elevated risk of default based on a number of factors, including building occupancy, upcoming lease expirations and the amount of debt the owner has on the property. The ratings agency added seven loans totaling $263.5 million backed by Houston collateral to its list."

"On a list of markets with the most 'Watchlist exposure,' Houston moved up 10 spots in the past year to No. 5, according to the Morningstar report. The top four markets on the list are New York City, Los Angeles, Washington, D.C., and San Diego."

From Costar. "Over the past 12 months, the balance of Houston loans on the Watchlist has grown by more than 50% to $748.1 million, moving Houston up to have the fifth-largest Watchlist exposure from 15th largest one year ago. Much of the increase can be attributed to 2007 loans, whose Watchlist exposure more than tripled, and 2013 loans, which saw a 188.2% increase over the past 12 months. Six of the seven loans added to its Watchlist have Morningstar loan-to-value ratios greater than 90%, including five with LTVs above 100%."

"Office vacancy in Houston increased nearly four percentage points to 14.6% in the third quarter of 2016 from 10.8% in 2014, according to CoStar Group. Sublease space pushes the total availability to roughly 20.0%. While office buildings made up the largest property type added to Morningstar’s Watchlist in November, it also was seeing weakness in other property types as job losses from energy-related sectors weigh on demand. It added two multifamily loans, the $13 million Champions Centre Apartments loan in CSMC 2007-C4 with a $100,000 value deficiency; and the $5.7 million Colonial Oaks at Westchase loan in FREMF 2011-K14 with a $1.8 million value deficiency."

The Arizona Republic. "If you see a big construction crane in metro Phoenix now, chances are it’s the site of a new apartment complex. The Valley is in the midst of an apartment building boom. Developers are almost racing to get the complexes up. Enticed by rising rents, they are turning parking lots on prime vacant corners, old restaurants, half-empty shopping centers and older, run-down complexes into shiny, new upscale complexes."

"These complexes are being quickly built, pretty rapidly filled up with renters and then sold. Investors have spent a record $4.5 billion on Valley apartment complexes through November of this year, according to research from ABI Multifamily. And both big-time investors, including pension funds and life insurance companies, and even individual investors aren’t done buying, ABI's Thomas Brophy said."

"But when the Valley goes through a building boom, there’s always concern about a bust. Last month, the Elevation on Central complex in midtown Phoenix, which was completed just a few months ago, sold for $60 million. During the same week the Alta Tempe apartments, near the city’s lake, sold for almost $68 million. 'Alta Tempe is a premier core community with a tremendous downtown Tempe location,' said CBRE broker Asher Gunter, who negotiated those two big deals with Tyler Anderson, Sean Cunningham and Matt Pesch."

"That apartment brokerage team is pretty busy now. And their investor clients definitely have a lot of new developments to choose from with more than 10,000 apartments recently built, under construction or planned in metro Phoenix. The heady number of new apartments in the Valley gives some folks pause, though. After two years or steady increases, the average Phoenix-area apartment rent did dip a bit last month, according to research firm Yardi Matrix."

The Columbia Daily Tribune in Missouri. "Despite a downturn in enrollment at the University of Missouri, a West Coast investment management firm is enthusiastic about its $21.6 million purchase of the Gateway apartments at 3904 Buttonwood Drive. 'We understood there would be a drop in enrollment' at MU as a result of campus turmoil last fall, said Alexander Philips, CEO and CIO of TwinRock Partners. Philips said that the company’s experience with The Row and Columbia’s national recognition as a college community — along with MU’s participation in the Southeastern Conference — 'made us feel comfortable there would be a rebound' in enrollment 'at some point and time.'"

"He said Gateway, a 450-bed complex built in 2006, had an 85 percent occupancy this year. 'We’re not happy with that,' Philips said. 'With student housing, you want to be around 95, 97' percent. He said the complex averaged around 95 percent occupancy since opening in 2006. Occupancy at The Row is in 'the low 90s,' he added."

"The topic of student housing vacancies was the focus of a report presented last month to the Columbia City Council. The student housing report noted that Columbia’s 25 apartment complexes had 4,414 rental units with an average vacancy rate of just under 20 percent. Excluding complexes with 50 percent or greater vacancy, which were considered outliers in the report, the average was 9.8 percent."

"Mayor Brian Treece has bemoaned the growing bevy of 'luxury student high-rises,' particularly downtown. He noted that the rooms often rent for $1,000 a month and higher, a factor that challenges the city’s initiatives to advocate for more affordable housing. 'It actually inflates the rent on that secondary housing market,' he said. 'Unfortunately, that is driving out the opportunity for young families' to rent or own a home 'at a reasonable level.'"

"Columbia-based Catalyst Design Works, previously known as Trittenbach Development, is known for its projects at Discovery Park and Brookside student apartments. The company provided an analysis several months ago that concluded 'there’s likely an oversaturation of student housing' in the Columbia market. Catalyst spokesman Jack Cardetti has said the company 'takes a much longer view of the market' for student housing unlike 'most out-of-state developers who are looking to build something and then flip it rather quickly.'"