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10 Must Reads for the CRE Industry Today (January 4, 2017)

 

  1. Real Capital Markets: Investors still sweet on commercial real estate “Investors still love commercial real estate. And they love multifamily properties most of all. That’s the takeaway from a national investment survey published this January by Real Capital Markets. The company completed the survey in November of last year, finding that 70 percent of commercial real estate investors from around the United States were in a buying mode at the end of the year. ‘RCM’s Investor Sentiment Survey showed that investors are still aggressively looking for acquisitions and intently focused on keeping the course with tried and true property sectors,’ said Steve Shanahan, executive managing director with Real Capital Markets, in a statement. ‘Many investors remain optimistic in spite of economic conditions, potential interest-rate changes and domestic and international events that could impact short-term activity.’ Not surprisingly, the multifamily sector is the top investment choice among survey respondents, with 49 percent of investors saying they prefer to sink their dollars into apartment properties. Industrial was also a popular investment choice, with 34 percent of investors saying they prefer this asset class. Next came retail and office, both favored by 32 percent of investors.” (REJournals.com)
  2. Real Estate Predictions 2017: Has multifamily housing finally hit its peak? Has multifamily housing finally hit its peak? That's the opinion of at least one of our circle of experts for our highly anticipated real estate predictions for 2017. It’s a mixed bag of opinions from experts connected to the industry in a variety of ways. Agreements? There are a few, as most still feel urban centers will be where it’s at. And though most feel the election of business-minded Donald Trump as president is a good thing, many feel real estate could be facing a downturn, especially during the second half of the year.” (NJBiz.com)
  3. Las Vegas Commercial Property Market Ends 2016 on Upswing “According to a new report by Xceligent and the Commercial Alliance Las Vegas (CALV) shows the commercial real estate market in Southern Nevada ended 2016 on an upswing, with positive momentum in the office, industrial and retail markets. CALV President Jennifer Ott, CCIM, and a longtime local commercial real estate broker, said most aspects of the industry continued to improve through 2016. And she said most of her peers expect more of the same in 2017. As an example, she cited continued progress in the local retail market, which is her specialty…The report found that more than 2.4 million square feet of local retail space was leased throughout 2016. Ott said areas around the Galleria at Sunset mall in Henderson and in the southwest part of Las Vegas have been in especially high demand, as reflected by their below-market average vacancy rates of 5.2 and 6.2 percent, respectively.” (World Property Journal)
  4. It’s getting cheaper to rent in downtown Miami “Good news, renters: It’s getting cheaper to live in downtown Miami. As developers deliver a bounty of new condos and rental apartments in 2017, the increased supply is helping keep rents in check, according to a new report from Miami’s Downtown Development Authority. ‘Landlords are trying to retain tenants because [tenants] now have these new options,’ said Anthony Graziano, of Integra Realty Resources, who authored the report. ‘It’s going to be a renter’s market in 2017.’ In 2017, developers are expected to complete nearly 6,350 condo and rental apartment units, the most in a single year during this real estate cycle, according to the DDA. (For the first time, the majority of those units are rentals, reflecting Miami’s rapidly cooling condo market.) Developers already delivered more than 4,700 units in 2016.” (Miami Herald)
  5. Caution On Commercial Real Estate “The past few years have been good ones for commercial real estate in the Twin Cities. Office tenants absorbed nearly 1 million square feet of space in 2015, the best showing for the market since the Great Recession. The retail market has rebounded, with an uptick in consumer spending as new grocery stores keep opening left and right across the metro. The continuing growth of e-commerce has been a key factor driving the robust industrial property sector as demand for large bulk-distribution centers remains strong. But commercial real estate has always been a cyclical business. If companies aren’t growing, they don’t need more office space. If consumers aren’t spending, the market doesn’t need more stores. Looking to the year ahead, many brokers forecast that markets will continue at roughly the same pace as in 2016. But some signs indicate that the pace of deals is starting to taper. Some brokers in all sectors are seeing signals of caution that could temper the pace of leasing as companies try to gauge where the economy, businesses and interest rates are headed.” (Twin Cities Business Magazine)
  6. PAC Buys Atlanta Trophy Office Tower “Three Ravinia, an 813,748-square-foot trophy office tower in Atlanta’s Central Perimeter submarket, has changed hands for the second time in less than four years. The new owner, Preferred Apartment Communities Inc., an Atlanta-based company which acquired the property through its indirect wholly-owned subsidiary, Preferred Office Properties LLC, did not disclose the sales price. When it was sold in May 2013 by Colonial Properties Trust to CBRE Global Investors, the 31-story office building went for $144.3 million. The Class A office tower is adjacent to the Crowne Plaza Hotel. The high-rise was built by Hines in 1991 and previously owned by Colonial Properties Trust from 2002 through 2013.” (Commercial Property Executive)
  7. Brennan Sells Prime Windy City Warehouse “Brennan Investment Group LLC knows when to let go. Roughly one hear after opening the suburban Chicago warehouse at 1780 Birchwood Ave., developed in partnership with DLJ Real Estate Capital Partners, the private real estate investment firm has sold the 140,000-square-foot industrial facility to Morgan Stanley’s Prime Property Fund. Located in Des Plaines, Ill., fewer than five miles from O’Hare International Airport, 1780 Birchwood sits on an 8-acre site that Brennan and DLJ purchased in 2013. With construction financing from The PrivateBank and Keeley Construction aboard as general contractor, the partners built the state-of-the-art facility as a spec project, and quickly attracted two tenants that claimed the entire tenant roster. Relying on the leasing expertise of Colliers International, which also represented Brennan in the sale transaction, the real estate company signed Pet Food Experts to a 98,800-square-foot lease in June 2015, and landed a commitment from quartz surfaces producer Cambria Co. for the remaining 40,500 square feet just three months later.” (Commercial Property Executive)
  8. What Chicago learned from privatizing some affordable housing “No one really knows what affordable housing policy will look like under the Trump administration. Budget cuts and other regulatory changes could be on the horizon. Some big trends, particularly the shift to deregulate public housing agencies and privatize affordable housing, could continue. It's likely, though, that private developers, both nonprofit and for-profit, will still play a growing role in providing housing for low-income households. In that context, I have been thinking about what Chicago's experience tells us about how private developers of affordable housing see themselves. After all, they're not just housing working families or seniors—they are also housing and providing support services to the neediest families.” (Crain’s Chicago Business)
  9. Manhattan office demand just couldn’t keep up with new supply in 2016 “Tenants gobbled up more than 33 million square feet of Manhattan office space in 2016, pushing leasing activity up 5.5 percent year-over-year, according to a new report from Colliers International. But even as large chunks of new supply came online, many big tenants chose to renew their leases and stay put, resulting in the market seeing negative absorption for the first time since 2009. Demand was strong last year, with WeWork on a tear signing roughly 800,000 square feet of new leases and expansions and Swiss bank UBS renewing 900,000 square feet at RXR Realty’s 1285 Sixth Avenue, Colliers data show. In fact, the 33.1 million square feet leased in 2016 was the third-highest total in the past 10 years, behind 37.38 million square feet in 2014 and the 33.92 million square feet leased in 2013.” (The Real Deal)
  10. New Orleans Saints champion, partner, to expand Dunkin’ Donuts in Louisiana “A new partnership plans to open dozens of Dunkin’ Donuts locations in Louisiana. The company announced that New Orleans Saints Quarterback Drew Brees, in partnership with existing franchisee Vik Patel, has signed an agreement to develop up to 69 new Dunkin' Donuts restaurants in New Orleans, Baton Rouge, Shreveport, Monroe and Alexandria, Louisiana over the coming years. Brees is a New Orleans Saints Super Bowl champion and MVP. The first location under the new partnership is planned to open in 2017, and the group will also co-own five existing Dunkin' Donuts restaurants in Louisiana.” (Chain Store Age)
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