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10 Must Reads for the CRE Industry Today (April 22, 2016)

10 Must Reads for the CRE Industry Today (April 22, 2016)

  1. Skanska eyes commercial development expansion in United States “Swedish construction company Skanska plans to expand its commercial property development business in the United States, betting interest rates won't rise fast enough to dent strong investor demand for high-yielding real estate. Skanska's U.S. chief Richard Cavallaro said the company's goal this year was to identify which U.S. cities were best for investment in commercial development.” (Reuters)
  2. Zurich Pays Record Price for Philadelphia Office Development "Zurich Insurance Group has acquired 2.0 University Place, a five-story, multi-tenant, LEED Platinum construction office building in Philadelphia, Pa., from University Place Associates, for $41.25 million. ‘That is a record square-foot price for Philadelphia ever,’ Scott Mazo, University Place Associates principal, told Commercial Property Executive. ‘I sold for multiple reasons. The transition of going from affordable housing to commercial; the size of the transaction costs are much higher, and for me, I had goals and objectives to create some capital assets. Also, because of the social and economic history, I felt that having someone who would recognize the value and acknowledge our vision: the commitment to healthy building at the highest level of environmental technology at the LEED platinum level was important to our brand.’ Located at 30 N. 41st St., the building is completely leased, with the U.S. Department of Homeland Security, Citizenship and Immigration serving as its anchor tenant leasing three floors.” (Commercial Property Executive)
  3. U.S. Architecture Billings Index Ends Q1 on Uptick “The American Institute of Architects (AIA) reported this week that the March 2016 Architecture Billings Index score was 51.9, up from the mark of 50.3 in the previous month. This score reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 58.1, down from a reading of 59.5 the previous month. ‘The first quarter was somewhat disappointing in terms of the growth of design activity, but fortunately expanded a bit entering the traditionally busy spring season. The Midwest is lagging behind the other regions, but otherwise business conditions are generally healthy across the country,’ said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD.  ‘As the institutional market has cooled somewhat after a surge in design activity a year ago, the multi-family sector is reaccelerating at a healthy pace.’” (World Property Journal)
  4. 5 Takeaways From the Self-Storage Industry Boom “The key advantage that self-storage units have over other potential real estate investments is that they are recession-resistant. Businesses and people will always need to store things. During good times, they want to store less valuable things while they buy more valuable equipment. During bad times, they try to store what things they can save. In fact, self storage is so resilient that during the 2008 recession, it was the only real estate sector that managed positive growth. And while most business models will have problems during a recession, every entrepreneur should try to figure how he or she can build a business so that they will customers during tough times.” (The Street)
  5. Costco in consortium eyeing assets of Woolworths' hardware chain: Source “U.S. retail giant Costco is part of a consortium eyeing the assets of Woolworths' troubled Australian hardware chain, Masters, a source familiar with the talks told CNBC. The Australian newspaper reported on Wednesday that listed Australian property group Charter Hall and the Wesfarmers-owned hardware chain, Bunnings, had teamed up to bid for 43 Masters sites. A source told CNBC that Costco was also part of the bid group. Reports suggest any bid could be worth up to 1 billion Australian dollars ($770 million).” (CNBC)
  6. Amazon to open new Dallas fulfillment center “The digital retailing giant plans to open a sixth Texas fulfillment center in Haslet, making it the fourth Amazon fulfillment center in the Dallas-Fort Worth metroplex. Amazon currently employs more than 8,000 full-time hourly associates at its Texas fulfillment centers and plans to create 1,000 more full-time positions in the new Haslet facility when it opens. Employees at the 1 million square-foot Fort Worth fulfillment center will pick, pack, and ship smaller customer items, such as books, electronics and toys.” (Chain Store Age)
  7. Harvard Growing in Allston with New Science and Engineering Complex “Harvard University is moving ahead with the development of a $1 billion Science and Engineering Complex in Allston, Mass., the centerpiece of the university’s ambitious 10-year master plan for numerous construction projects in the neighborhood. Now that the Boston Redevelopment Authority has approved the 556,850-square-foot complex, construction is expected to start this summer and be completed by 2020. The SEC will be home to about two-thirds of the Harvard John A. Paulson School of Engineering and Applied Sciences and will feature state-of-the-art laboratories along with classrooms and related teaching and research space, according to the university. The six-story building is being designed by Behnisch Architekten, an architecture firm known for designing sustainable, innovative research properties. It will be used by more than 900 undergraduates, 400 graduate students, 450 researchers and at least 80 faculty members. The university said the SEAS tripled the number of students over the past 10 years.” (Commercial Property Executive)
  8. EB-5: Dead or alive? “EB-5 investors by definition live outside the U.S., sometimes thousands of miles away. But it ultimately falls on them to determine which real estate development projects in NYC (or elsewhere in America) are safest to put their cash in. That can be a tough task since developers are trying to woo them and present their projects in the best possible light.” (The Real Deal)
  9. Office Perks Are Dumb “Perks are signifiers, a way for organizations to express a commitment to a laid-back corporate culture and, at some companies, a consolation prize for lower salaries and uninteresting work. The trend can be traced back to Google and Zappos. Both built hugely successful businesses on popular products and defined their workplace cultures with the help of beanbag chairs. Perks have since proliferated at startups, media organizations, and tech companies hoping a more comfortable environment will motivate employees and lead to Google-size profits. Some research has linked company culture to profits. That, in turn, has led to a keeping-up-with-the-Googles phenomenon in which certain perks become almost mandatory. ‘Here in Silicon Valley it's almost passé to have unlimited vacation, dogs at work, or free food, believe it or not,’ said Scott Dobroski, the director of communications at Glassdoor. ‘People are getting more creative.’” (Bloomberg)
  10. GGP, Thor plan to bump 685 Fifth Avenue by five stories “General Growth Properties and Joe Sitt’s Thor Equities’ are planning to create five new floors of office space at 685 Fifth Avenue, above Coach’s new flagship store. The store, which has been dubbed the ‘Coach House,’ is part of the luxury handbag retailer’s strategy to rebrand itself by focusing on prime locations and reducing its footprint elsewhere. GGP announced the 23,400-square-foot lease in February. Coach will be paying around $4,000 a square foot in rent for the corner spot at West 54th Street — not unheard for that stretch of Fifth Avenue, 6sqft reported. The store is slated to open in the fall, according to the website.” (The Real Deal)
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