- Optimism in Commercial Real Estate “Commercial real estate executives appear relatively optimistic about the general state of the market in 2016, with many predicting higher than average deal volumes for their firms. When considering the adoption of new technology, most believe that the influx of CRE tech companies is revolutionizing the industry. These executives recognize that while the U.S. CRE market is recovering, there are still certain segments that are poised for significant decline.” (Forbes)
- The salary you need to afford the rent in these 15 cities “Rents are on the rise — and for residents of some cities, this means they must make six-figure incomes just to afford a two-bedroom apartment. In April, rent jumped 3.7% from a year prior, part of a steady rise that’s been going on for months now. “Rent price growth matched the highest since the financial crisis, another indication of the imbalance in the nation’s housing market,” my colleague Andrea Riquier wrote in her Marketwatch column Tuesday. For some, these rental price hikes have made renting unaffordable. Residents of San Francisco -- now the nation’s priciest rental market — need more than $216,000 to afford a two-bedroom in their area, a study released Tuesday by financial website SmartAsset concluded; meanwhile, the median income in San Francisco is less than $80,000 per year.” (MarketWatch)
- Meet the Private Company That Has Changed the Face of the World “The Riyadh Metro is just the kind of epic, technically mind-boggling undertaking that makes its lead contractor, Bechtel, perhaps the world’s leading builder of one-of-a-kind megaprojects. A Bechtel-led team is installing 39 miles of tunnels, viaducts, deep-underground stations, and soaring terminals, all in the heart of a city that has never seen a bit of commuter track. (Other contractors are building additional metro lines, but Bechtel is doing the most difficult work in Riyadh’s center and using four of the seven TBMs assigned to the project.) At $10.1 billion, the Riyadh job is the biggest lump-sum civil engineering project ever awarded to a single team, and it’s being done for a fixed price. The consortium headed by Bechtel—its partners are contractors CCC of Greece and Almabani of Saudi Arabia, as well as Siemens of Germany, which is supplying the trains—is shouldering all the financial risk. Bechtel has guaranteed that by October 2018, the colossal jumble of parts will be united into a seamless network, with futuristic, self-driving trains running end to end." (Fortune)
- Amazon planning second grocery store: Report “Amazon is planning to build a second 'click and collect' grocery story, according to a Monday report from the Silicon Valley Business Journal. Reports surfaced in July 2015, originating from the same outlet, that Amazon was planning a grocery store in Sunnyvale, California. That store would allow customers to order their groceries online and then pick them up readied at the brick and mortar location. The second location, according to this week's report will be in San Carlos, California, and public records tie Amazon to the potential space.” (CNBC)
- Simon’s second coming? “When Saks Fifth Avenue, one of the great old American department stores, shuttered its location at the Shops at Riverside in Hackensack in 2014, the closure left a major hole in the fabric of the New Jersey property. The Saks branch had been the centerpiece of the mall since its 1977 debut to great fanfare as an anchor tenant. For many years the store was a major draw for New Jersey shoppers who wished for a taste of Manhattan glamour at their doorsteps. In the years following the financial crisis, Saks’ glory days were gone; sales lagged and the store was besieged by competition from rivals such as Bloomingdale’s and Neiman Marcus. The closing also had the potential to cause a big problem for the mall’s owner: Retail behemoth Simon Property Group — the largest mall operator in the U.S. — was suddenly faced with 100,000 square feet of vacant property.” (The Real Deal)
- How to make city housing more affordable “Some of the most sought-after cities in the U.S. face a growing affordability crunch. While San Francisco and New York are known for especially high housing costs, places such as Seattle, Boston and Washington are finding more people priced out. It’s a long way from the days when cities were grappling with an exodus of people and their wealth; now they fear becoming too exclusive. A recent analysis by real estate information company Zillow Group Inc. shows many homeowners spending at least a third of their income on mortgages in some cities, while renters in general spend an even bigger percentage of their income on housing. ‘If you ask mayors across the country, their No. 1 problem is affordable housing,’ says Svenja Gudell, chief economist for Zillow.” (MarketWatch)
- Inglewood, Calif., Pins Hopes for Commercial Revival on N.F.L.’s Rams “This year, there is fresh hope to revive Inglewood, which is planning to welcome the Rams football team back to the Los Angeles area after 20 years in St. Louis. The Rams’ owner, E. Stanley Kroenke, is building an 80,000-seat stadium, at a cost likely to exceed $2 billion, to accommodate the team, and an entertainment complex is being built nearby as part of a continuing project called Hollywood Park. The development will include about 900,000 square feet of retail space, a hotel, 2,500 residential units and 25 acres of public parks, all on the site of the former Hollywood Park Racetrack. Plans include almost 800,000 square feet of office space. ‘This development adds a dimension to the city that it has never had before,’ said Inglewood’s mayor, James T. Butts Jr." (The New York Times)
- New York City's High-Price Retail Real Estate Expected To Slow Down “Adjustments in Manhattan's retail asking rents are being impacted by the slowing global economy, cautious retailers and a rising supply of space. ‘While there are retailers looking at potential stores to lease, the velocity of tenants committing to new leases has slowed and deals are taking longer to complete,’ the report said. According to REBNY's Manhattan Retail Advisory Group, which reviewed the data: ‘It appears that retailers have determined that the present period of slowing retail demand presents a challenge if they were to make a major branding push to increase their visibility. The retail property owners that are adjusting asking rents seem to be those who have had space on the market for an extended period of time.’ Back in November, the top end of Fifth Avenue in Manhattan was named the most expensive retail real estate on the globe, according to Cushman & Wakefield's annual ‘Main Streets Across the World’ research report.” (Fashion Times)
- The Jehovah's Witnesses put 69 Adams St. in DUMBO up for sale “The Jehovah's Witnesses have just put onto the sale market a development site in the heart of DUMBO, 69 Adams St. The building that now occupies the site has a four-story recreational facility and an 84-space parking garage. Its rooftop is graced with an open-air tennis court — which is topped by a fence so cars and pedestrians down below don't accidentally get pelted with over-exuberantly hit balls.” (Brooklyn Daily Eagle)
- Arlington Mixed-Use Development Commands $406M “A joint venture between AvalonBay Communities Inc. and Regency Centers Corp. has acquired Market Common Clarendon, a mixed-use development located in Arlington, Va., for $406 million. The development boasts 300 Class A apartment homes; 300,000 square feet of retail anchored by Whole Foods Market, Apple, Crate & Barrel, The Container Store, Pottery Barn and Williams-Sonoma; and an adjacent vacant building identified for future redevelopment. According to the deal, AvalonBay will acquire all of the benefits of the residential components, while Regency will acquire the retail and all remaining components.” (Commercial Property Executive)
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