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Heartland Feature Archive

FeaturesHeartland Feature ArchiveIndustrialMidwest

Real Capital Markets, SIOR: ‘Plenty of Runway Left’ for Industrial Sector

by Kristin Harlow

CARLSBAD, CALIF. — Institutional, private and foreign investors all continue to pour capital into the industrial sector in the Midwest and nationwide, confirming there is still “plenty of runway left,” according to the 2018 Industrial Investor Sentiment Report from Real Capital Markets (RCM) and SIOR. The steady flow of capital and positive momentum within the sector comes despite looming threats from rising interest rates, tariffs and a diminishing supply of quality assets. “The industrial market and those who invest in it have enjoyed an incredible, long run because of its ability to adapt to the needs of specific users and subsectors, and embrace the ongoing evolution of the global economy,” says Tina Lichens, COO of Carlsbad, Calif.-based RCM. “Given this performance and consistency, we have every reason to believe there is plenty of runway left.” RCM and SIOR compiled the study through a survey of RCM principals, SIOR members and subsequent interviews with key industry leaders. Year-over-year comparisons Questions in the survey tracked participants’ perceptions of investment activity, pricing and cap rates. Notably, more than 48 percent of respondents believe that industrial activity will remain at or about the current level. One year ago, that figure was 43 percent. More …

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FeaturesHeartland Feature ArchiveIllinoisMidwestRetail

Marry Online Efficiency With Brick-and-Mortar Retail, Say Experts at ICSC Chicago Deal Making

by Kristin Harlow

CHICAGO — How retailers can best integrate online and brick-and-mortar sales as well as utilize new technology to analyze shopper activity were two of the most prominent discussion points at this year’s Chicago Deal Making & VRN Outlet Convention. The event, hosted by the International Council of Shopping Centers (ICSC), took place at Navy Pier on Oct. 17-18 and attracted more than 2,400 registered attendees. In a recently released study from ICSC, a new store opening was shown to boost a brand’s web traffic within that market by an average of 37 percent. There’s a special term for it, known as the “halo effect.” The magic formula for today’s retailers and shopping centers is to marry online efficiency with brick-and-mortar locations, according to Karen Fluharty, partner with Montville, N.J.-based Strategy + Style Marketing Group. Fluharty’s remarks came during the “Future of Outlets” session. Today, an omnichannel presence is increasingly critical to a retailer’s competitiveness. Online retailers with growing sales have started successfully transforming their “clicks” into “bricks.” Warby Parker and Bonobos are two of the most well-known online retailers with a steady expansion of physical stores. What’s beneficial for outlet centers is that nine out of 10 consumers say they …

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Kingston Square Affordable Housing, Kokomo, Indiana
FeaturesHeartland Feature ArchiveMultifamilyStudent Housing

Student Housing Pushes Out Affordable Living in College Towns

by Jeff Shaw

For Kyle Bach, CEO of The Annex Group LLC, there’s an affordable housing crisis taking place in large university towns. After extensive research in Bloomington, Indiana, and other similar towns, Bach found that over the past decade or so virtually all new multifamily product added to the market has been either student or luxury housing. This has priced out the workforce or affordable housing residents in those communities, he says. About a year-and-a-half ago, Bach’s Indianapolis-based firm reconfigured its development focus in effort to fill this need by providing affordable housing for the university workforce or married students. In Bloomington, The Annex Group is in the midst of securing final approvals for Union at Crescent, a 146-unit affordable housing development about two miles from Indiana University. The $18 million project has received tax credits from the Indiana Housing Community Development Authority. The project will also be financed with Section 42 of the low-income housing tax credits program (LIHTC). With this type of financing, law regulates that full-time students are not allowed to live in the development unless they are married and their spouse’s income qualifies. The Annex Group hopes to break ground in the fourth quarter of this year with …

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FeaturesHeartland Feature ArchiveMidwestMultifamily

Midwest Apartment Demand Isn’t Dropping Anytime Soon, Says JVM Realty CEO

by Kristin Harlow

Apartment rents in Detroit are now the fastest rising in the United States among the nation’s largest cities, growing at an annual rate of 5.3 percent as of May 2018, according to Yardi Matrix and RENTCafé. Across the Midwest, the apartment market remains very strong with high demand and therefore increasing rents. Jay Madary, president and CEO of Oak Brook, Ill.-based JVM Realty, spoke with REBusinessOnline to discuss the state of the market, including the pace of investment sales. JVM owns and operates Class A and B apartment communities in Midwest markets such as Cleveland, Indianapolis, Kansas City and suburban Chicago. REBusinessOnline: How would you assess the overall state of the apartment market in the Midwest? Jay Madary: I think it’s really strong. In general, supply and demand remain balanced. We’ve certainly seen a surge of new construction in most Midwestern markets, and those new units coming online have cooled rent growth a bit. Whereas we were seeing growth of 5 to 6 percent a couple of years ago, now 2 to 4 percent is more typical. But the robust job growth in the region and the historically low unemployment rates have kept demand high, and those new units are largely being …

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FeaturesHeartland Feature ArchiveLee & AssociatesRetail

Retail Conversation Is All About ‘Rightsizing,’ Says Lee & Associates Principal

by Jeff Shaw

LAS VEGAS — At RECon, the world’s largest retail real estate trade show held last week in Las Vegas, REBusinessOnline sat down with veteran Chicago broker Rick Scardino of Lee & Associates. A principal with the Chicago office, Scardino spearheads the retail division at Lee & Associates of Illinois. Discussion topics ranged from backfilling vacant space to local, independent grocers and the movement of online retailers embracing brick-and-mortar locations. What follows is an edited version of that conversation. REBO: According to Mid-America Real Estate Corp.’s Shopping Center Report, development has tailed off about 5 percent year over year. Is that a surprise or not? Scardino: This has been going on for a few years. It’s well known that the United States is the most over-developed retail country in the world by far. It’s all about rightsizing, simple supply and demand. I don’t see it as a bad thing. Certainly existing landlords who aren’t developing are thrilled to see less new competition coming online. There really hasn’t been a need for it. Mellody Farm in Vernon Hills, Illinois, is one of the few new projects with Whole Foods Market, REI and Nordstrom Rack as anchor tenants. Regency Centers Corp. is the …

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FeaturesHeartland Feature ArchiveMichiganMidwest

It’s Not Too Late to Invest in Detroit, Say Entrepreneurs Dan Gilbert, Chris Ilitch

by Kristin Harlow

DETROIT — At the conclusion of his speech at the Urban Land Institute (ULI) Spring Meeting in Detroit, billionaire businessman Dan Gilbert gave conference goers one piece of advice. “Get in on some of these investments in Detroit,” he said. “It’s not too late.” The event, held May 1-3 at the Cobo Center, drew 4,200 attendees from the real estate industry. It was the first ULI event in Detroit in 40 years. Gilbert, founder and chairman of Quicken Loans Inc., spoke at the opening panel along with Christopher Ilitch, president and CEO of Ilitch Holdings Inc. Robert Taubman, president and CEO of Taubman Centers Inc., moderated the session, entitled “Detroit’s Renaissance.” Subject matter ranged from Detroit’s past to present, including development highlights and the resilient DNA of its citizens. Gilbert’s real estate company, Bedrock, has acquired and developed more than 100 commercial properties totaling over 16 million square feet in the city’s urban core. The Ilitch family, made famous by Little Caesars Pizza, owns both the Detroit Red Wings and the Detroit Tigers and is responsible for a 50-block mixed-use project under development known as The District Detroit. For decades, the Motor City was a well-publicized story of economic decline …

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FeaturesHeartland Feature ArchiveNortheast Feature ArchiveSoutheast Feature ArchiveTexas & Oklahoma Feature Archive

CBRE: U.S. Apartment Sector Gets Boost from Comprehensive Tax Reform

by David Cohen

LOS ANGELES — The sweeping tax reform bill signed into law in late 2017 by President Donald Trump is expected to benefit the U.S. multifamily investment market, according to a new report from CBRE. The report states that under the Tax Cuts and Jobs Act, the tax benefits of renting over buying a home will increase in 29 of the 35 largest U.S. markets. That number is up from 15 markets before the tax reform. The new tax law increases the standard deduction from $12,700 to $24,000 for a married couple. This means more people will take the standard deduction rather than itemize items such as mortgage interest, which CBRE said will significantly benefit renters in most of the country’s largest markets and encourage renting over homeownership. Additionally, limitations on state and local tax deductions, as well as the loss of the mortgage interest deduction on home purchases of $750,000 or more, will marginally impact the cost of housing in high-cost markets. “The new tax policy’s raising of the standard deduction, combined with limitations on mortgage interest and state and local tax deductions, will significantly increase the attraction of renting versus buying housing,” said Spencer Levy, CBRE’s senior economic advisor and …

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FeaturesHeartland Feature ArchiveIllinoisMidwestOffice

Six Critical Things to Get Right in an Office Renovation

by Kristin Harlow

PLAINFIELD, ILL. — Buoyed by a strengthening economy, more companies have the resources to invest in office redesigns. That is good news — a well-designed office renovation can transform an existing workspace into a dynamic, energy-efficient nerve center for staff. If properly carried out by a skilled contractor, an office renovation can optimize employee productivity and craft an effective work environment. Here are six ideas that reflect today’s most influential office design trends, according to Plainfield, Ill.-based Cicero Development Corp., a general contractor specializing in commercial renovations. 1. Make a color splash The typical aesthetic of office design is being replaced by workplaces that integrate bold pops of color. This is not just to elevate the visuals, but also to code different sections, whether they are departments or desks. As a contrast to many offices’ neutral decors, jewel tones (resembling the colors of gemstones) and energetic patterns are becoming more popular in making a strong statement. Vibrant colors do more than show people that your business is creative and dynamic. Colors can have psychological effects on employees, as some tend to inspire creativity and productivity. 2. Improve the floor plan Open, fluid floor plans improve efficiency and mobility for your …

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FeaturesHeartland Feature ArchiveMidwestMultifamilyTop Stories

Aided by Tax Credits, Adaptive Reuse Pays Off for Developers

by Kristin Harlow

Transforming older, historic buildings into apartment rental units opens myriad opportunities for developers beyond simply saving a neighborhood building. The process enables them to create unique floor plans and hip spaces that resonate with many of today’s renters and lease up quickly. These adaptive reuse projects are often costlier than new construction and fraught with challenges, but the consensus among developers is that the reward is worth the risk. “It’s economic development,” says Nick Anderson, a developer with Plymouth, Minnesota-based Dominium. “Converting these historic structures into apartments is very labor-intensive, so the projects generally create a lot of construction jobs. The properties themselves become their own little communities and can have a catalyzing effect on the surrounding neighborhood.” Preserving history Dominium completed construction of Millworks Lofts in Minneapolis in July of this year. The 78-unit affordable housing property was 100 percent leased prior to opening its doors in August, says Anderson. The building, which dates back to the 1920s and was formerly home to Lake Street Sash & Door Co., is on the National Register of Historic Places. Dominium purchased the vacant building in 2016 and financed the project using both federal and state historic tax credit equity. All major …

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FeaturesHeartland Feature ArchiveMidwestMixed-UseOhio

Grandview Yard Takes the LEED on Neighborhood Design in Columbus, Ohio

by Kristin Harlow

COLUMBUS, OHIO — In spring 2009, the United States Green Building Council formally launched a new program with the vision of fundamentally changing how the country evaluated green design and development, LEED for Neighborhood Development (LEED-ND). The launch of the LEED-ND program coincided with the first phase of Columbus, Ohio-based Nationwide Realty Investors’ Grandview Yard development: a $700 million, 1.2 million-square-foot, master-planned mixed-use neighborhood located in the fast-growing Grandview Heights community, just minutes from downtown Columbus and The Ohio State University. The first standard of its kind, LEED-ND embraces principles of smart growth and new urbanism, encouraging sustainable and environmentally responsible design and development on a broad and integrated scale. Like a scene in a movie that begins with the camera tightly focused on one element before zooming out to reveal an eye-opening new perspective, LEED-ND is about acknowledging context and connection. Distinguished LEED project Grandview Yard was one of the Midwest’s first LEED-ND Silver neighborhoods. When site work began on the first phase of development of the project in September of 2009, a comprehensive and ambitious on-site reuse and recycling strategy was already in place. An extensive and highly-coordinated warehouse demolition process served as both a challenge and an …

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