Kevin May: It appears that retail sales are going to be strong for the holidays. Attendees were very upbeat, but a couple people said that prices are too high, and they think a correction is coming. Tom McGee, the CEO of ICSC, said that retail sales are not losing as much to online as the media would have us believe.
But some people do think prices are inflated and are a little gun shy on the transaction end.
Hurricanes Harvey and Irma obviously did some major damage to the multifamily markets in impacted areas of Texas, especially the Houston metro area, and parts of Florida. The rebuilding process will be fruitful for construction firms doing work in the area, but could shoot up costs for the rest of the country in the coming months, according to a recent Marcus & Millichap webinar titled: “Post-Hurricane U.S. Apartment Investment Outlook.”
There was approximately $110 billion to $180 billion in damage and lost business as a result of Harvey and $40 billion to $60 billion due to Irma. Harvey’s destruction was mainly due to flooding, making it costlier, while Irma’s culprit was primarily wind-damage.
Nine months later, we are getting some more interesting announcements.
Like Trump’s American IDEA concept, which targets midscale consumers, giant InterContinental Hotels Group (IHG) is launching Avid Hotels, which aims to target guests in a similar economic demographic. IHG, who already owns nameplates from the boutique Kimpton chain to Holiday Inn Express, says that Avid’s room rates will be $10 to $15 less per night, making it on the lower end of midscale. Its planned amenities, though, such as modern design, communal open spaces, as well as free Wifi and breakfast, make it sound relatively upscale for those traveling on a budget.
For starters, ULI says that one in four renters, or 11.1 million U.S. households, pay half or more of their income on housing. Reports have that number increase by another 1.3 million over the next 10 years.
Aside from the usual networking opportunities with old and new clients, there are some specific educational sessions that our associates will have their eyes on.
Those attending the conference on Monday will have the chance to gain some intel on leasing open-air centers from Richard Wolf, senior vice president of leasing at Madison Marquette. He will discuss leasing to new tenants and retaining current users in today’s environment. Attendees will reportedly “learn how to avoid the pitfalls of leasing to the wrong retailer, escape the boring repetitiveness of current trends, and create something truly sustaining.” Madison Marquette executives have built several innovative projects across the country, the newest being The Warf on the Washington D.C. waterfront, which will open later this month.
As GRS Group does frequently, we had a team of professionals at what is always an important annual conference, the recent CMBA Western States Conference, which took place in Las Vegas, for its 20th straight year.
There were several informational and educational sessions at the show, but we want to focus on two specific meetings for which slides were provided.
She pointed out that the industrial market, in no small part due to e-commerce, is having its best year since 2000. Additionally, Ludkin said that the multifamily fundamentals are still strong as well.
They say to never go grocery shopping on an empty stomach. Well, grocers have found a way to cash in if you do.
There are several “grocerants,” at chain stores and independent locations, that now have full-service restaurants and bars where consumers can taste the products they will be shopping for, or maybe in some cases, a hunger pain from seeing far too many appetizing items.
Though it likely took place well before in downtown locales of major global cities beforehand, a cornerstone of this example is the Mario Batali-nameplate, among other owners, Eataly, which opened in Manhattan in 2010. It has now grown exponentially in a short period of time.
The commercial real estate industry is very aware of how strong the industrial sector is right now, mainly due to the development of major warehouse/distribution facilities by Amazon and other companies fulfilling the ever-growing consumer demand for e-commerce.
Now it looks like the manufacturing sector is flexing its muscles.
The ship has sailed for those expecting any normality in the retail real estate industry.
For years, landlords have dealt with mass store closures and the pressure posed by online shopping, most significantly Amazon, but now things have gotten strange to the point of complete inconsistency.
Since the summer is near closing time, GRS Group thought it would be good to focus on the needed rest and recreation that those in the commercial real estate industry need before they hit the busy fall conference and networking season.
But there is still some time left before that to relax. One of the great options that hospitality consumers who want to be close to nature, yet not go through the extra work of pitching a tent and the other aspects involved with traditional camping, is called glamping. The concept is to have tent-like pods with beds and nearby bathroom and recreational access.
Companies involved in commercial real estate have realized a desire for this type of property.
In the first six months of 2017, commercial real estate transactions from firms, mostly based in Hong Kong, have hit $5.1 billion, according to CBRE. That has already surpassed the entirety of last year, which came in at roughly $3.5 billion.
The most major example is the acquisition of the 34-story “Walkie Talkie” office building, as well as another skyline fixture called the “Cheesegrater.”
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.