One of the most interesting pieces of American folklore is the nation’s infatuation with Bigfoot. Although the idea of a creature that is half man and half ape dates back to the 1800s, most of us think of that famous 1967 footage showing a grainy ape-like creature somewhere in the Pacific Northwest. Clevelanders have their own version of Bigfoot – it’s called IKEA. Rumors have swirled for nearly 30 years, with “sightings” ranging from North Olmsted to Beachwood. But before we talk about what could be, let’s first talk about what we know.
The Netherlands-based retailer offers a variety of household items. Although it is most noted for trendy, affordable and built-it-yourself furniture, it also carries kitchen items, bedding and office furniture, among other items. They operate over 400 stores worldwide, including 40 stores in the US. The facilities aren’t small, averaging around 300,000 square feet. Clevelanders infatuation with the chain dates to 1989, when IKEA opened a store in Pittsburgh. It was their 4th US location at the time but Clevelanders quickly took notice and within a few years,
Reprinted with permission. Authored by John Childs and Joshua Cook
A basic understanding of mineral rights can be important to evaluating your property. One common source of confusion when buyers or landowners contemplate value is the concept of the split estate. “Split Estate” refers to the separation of surface and mineral ownership, whereby two or more individuals own separate rights in the same land. Split estates are quite common throughout the American West, and many landowners do not even realize that their homes, businesses, or ranches are subject to the mineral rights of third parties. Understanding the relative rights of split owners, knowing where mineral ownership may be uncovered, and understanding how to investigate the likelihood of mineral development can help landowners negotiate risks and properly assess land values.
Much of this had to do with a spike in CMBS issuances, which hit $38.8 billion year to date, a jump from $30.7 billion over 2016’s first half. CMBS reportedly accounted for 36 percent of commercial-loan issuances during the second quarter, a spike from only 16 percent in the first quarter.
It’s well known that for a warm pick-me-up drink, coffee is the leader in the United States.
But for tea enthusiasts, Teavana is a cool, mainstream alternative to an independent specialty store where one can try a variety of different flavors and blends, not to mention the ability to purchase of a variety of drinkware.
The sale-leaseback sector of commercial real estate is mostly associated with retail pad sites, such as a drug, convenience store or quick-service restaurant. It can also be associated with sectors like office and industrial, but now another one is getting some attention.
Hotels are on now on the sale-leaseback menu, according to an interesting GlobeSt.com article. Reportedly sale-leasebacks for hospitality assets are a common occurrence in Europe but becoming more recurrent in the United States.
It’s hard to imagine, with rents so high in New York City, that the multifamily market could have challenges. Apparently, that was the case in the first quarter of this year, when transaction volume was down, according to Aerial Property Advisors.
Much of the problem during the first quarter was reportedly hesitancy surrounding the presidential election. Though there was still some weakness in April, it was apparently the best quarter for the number of transactions seen in the city since last year’s third quarter.
Under the Freddie Mac Green programs, if a borrower has a property where they are planning energy-saving improvements for either an acquisition or refinance they can save on financing in a few ways. The Freddie Green Advantage Program works in conjunction with the current Freddie Mac Conventional, Targeted Affordable and Seniors Housing products.
The Freddie program for green mortgage loans essentially runs on two tracks – Green UpSM, or Green Up PlusSM. Under the programs, borrowers must qualify for, and commit to implement, property changes geared toward reducing EITHER energy or water consumption by a minimum of 15% property wide. Borrowers who qualify have the ability to choose the upgrades they want to implement to meet both the 15% energy/water savings threshold while also spending a minimum dollar amount per unit (currently $350/unit). If the property is eligible for the program, and the property/borrower is able to meet these thresholds, the borrower may qualify better pricing and more funding to make the green enhancements.
Despite what has happened with the political turmoil in this country and the polarity the U.S. presidential election, there is one thing nearly everyone in the commercial real estate industry could agree upon — President Trump’s promise of a $1-trillion plan to improve the infrastructure in this country would be a good thing.
Nothing about his presidency would make more sense for commercial real estate than to apply upgrades to the nation’s roadways and transportation hubs, many of which have been in dire need of repair for some time. After all, the transportation of goods in a timely manner and workers more easily accessing their jobs, among other pluses, could only help the success of office, industrial and retail assets.
Now the e-commerce leader could further change commercial real estate’s industrial sector with another interesting patented concept – underwater warehouses.
The goods it sells could reportedly be placed into large lakes by several modes of transportation to be later retrieved for shipment. Amazon’s reasoning for these aqua spaces is that above-ground distribution centers are increasingly not sufficient to house all of the products that the company offers.
As part of its patent for the idea, the company will have sound sensors on balloons which will inflate and bring a water-tight container of items to the surface when they are transacted.
In the world of retail real estate, drug stores are a pretty solid bet. An aging population, mixed with an increased amount of goods provided by these businesses makes them a necessity for most people. A consumer can even obtain basic grocery goods at a pharmacy, which would have been unheard of several years ago.
Canadian commercial real estate is setting some trends for innovation if the recent BOMA International Conference & Expo, which took place in Nashville, is any indicator. Of the 15 assets that won major awards, four of them were located in Canada.
They won in some pretty serious categories, too: Industrial Office Building, Medical Office Building, Retail Building and Over One Million Square Feet.
Since we haven’t reported on our neighbors to the North much recently, it’s a good time to take a brief look at each property and the overall commercial real estate market in Canada.
The age of IoE (Internet of Everything) frees up companies to allow employees to work from wherever they want. After all, since most daily tasks done in an office are performed on a computer, and there are several ways to remotely monitor a worker’s productivity and accomplishments, why does location matter?
Demolition or renovation projects always present surprises and challenges. But, by 2017 dealing with asbestos and lead-based paint issues has become pretty routine for developers, lenders and consultants. And we all know PCBs are a potential issue in old electrical transformers. But, with every year that passes there are fewer PCB-contaminated transformers around, and besides they are usually the responsibility of the utility company anyway.
Polychlorinated biphenyls (PCBs) have been used as coolants and lubricants in transformers, capacitors, and other electrical equipment because they don’t burn easily and are good insulators. The manufacture of PCBs was stopped in the U.S. in 1977 because of evidence they build up in the environment and can cause harmful health effects.
Data centers seem like a pretty safe financial bet for commercial real estate investors.
As most major companies in the country, despite what industry they are in, become tech heavy, the need for data storage is only going to increase. Many offices and industrial buildings aren’t suitable for large numbers of servers, which have significant cooling and power needs that data centers provide.
It’s easy to forget that President Trump has his roots in commercial real estate. After all, his past activities in the industry are obviously overshadowed by the fact that he now leads the most powerful country in the world.
But that hasn’t stopped the Trump Organization from continuing to pursue CRE endeavors.
Trump’s company recently announced that it is starting a hotel chain called American IDEA. The concept, planned to launch in the Mississippi Delta area, targets midscale consumers and will reportedly concentrate on promoting local flair, coupled with “neighborly service.”
Though there are only three locations currently hammered out with partner Chawla Pointe, a family run organization, and MMI Hotel Group, the firm that runs its Chawla’s current portfolio, its sounds as though the Trump Organization has big plans for American IDEA. Eric Danziger, chief executive Trump’s hotel division, told The New York Times that there could be hundreds of American IDEAs eventually. At first, the company plans the concept for small and mid-sized towns that have a strong base of Trump supporters and a lack of midscale hotel options beyond lower-end travel facilities. The first three deals represent renovations of existing hotels under the Holiday Inn and Comfort Inn banners.
The deal is indicative of how institutional investors are starting to show more interest in a sector dominated more by private firms.
This is on top of a trend that has been building. There was $10 billion spent on student-housing transactions last year, the largest ever on record, according to an ARA Newmark Student Housing Group report cited by Bisnow. Student housing has been favored in the past during downturns in the economy, but that’s not the kind of climate we are currently facing. And like other commercial real estate sectors, investors are getting priced out of class A properties and going for value-added plays.
Besides these mega deals, senior-housing transactions in general are on the upswing, according to the National Investment Center. Total purchases of these assets totaled $4.4 billion during the first quarter. Institutions and private buyers are currently leading the way in these deals. Private-equity firm Blackstone alone made two buys totaling about $1.9 billion.
Businesses, commercial real estate firms among them, are usually not very thrilled about elections. After all, a change in political parties, or newly elected politicians, can have an adverse impact on the economy. At the very least, a degree of uncertainty can give investors pause.