Features

‘Broadening’ Economy on Track for Longest Expansion Cycle in U.S. History, Says Wells Fargo’s Mark Vitner

by John Nelson June 5, 2018

CHARLOTTE, N.C. — It’s been nine years since the Great Recession ended, and if the economy can make it to June 2019 without suffering a relapse, it will be the longest business cycle in U.S. history. Mark Vitner, managing director and senior economist of Wells Fargo Securities, believes that will happen because of how broad-based the recovery has been. “For the most part, over the last nine months to a year all 50 states have been growing, which is something that hasn’t happened before,” says Vitner, who is based in Wells Fargo’s Charlotte office. “Typically, when the economy broadens it makes for a more durable expansion. When the strength of the economy begins to narrow, with fewer industries and states expanding, that’s usually a sign that a recession is a year to 18 months ahead.” Vitner’s commentary came during his keynote address at the ninth annual Carolinas InterFace conference. The half-day event, which took place on Thursday, May 31 at the Hilton Charlotte City Center hotel in Uptown Charlotte, drew 212 attendees from across the commercial real estate industry in North and South Carolina. The veteran economist says that the United States is currently at full employment with a majority …

June 5, 2018

Features

Jobs Report: Unemployment Rate Hits 18-Year Low at 3.8 Percent

by Taylor Williams June 4, 2018

WASHINGTON, D.C. — The Bureau of Labor Statistics (BLS) released its monthly jobs report on Friday, June 1, revealing that the U.S. unemployment rate dipped to 3.8 percent following the addition of 223,000 jobs in May. The total increase in nonfarm payrolls exceeds the running 12-month average of 191,000 new jobs per month. The job growth numbers exceeded economists’ expectations, which according to Reuters was estimated at 188,000 new jobs. This performance contributed to the unemployment rate reaching its lowest mark since April 2000. “The new unemployment rate shows that April’s rate of 3.9 percent was not an anomaly,” says Ryan Tharp, director of research at Houston-based Transwestern. “But it’s important to note that the drop is partially attributable to tepid growth in the size of the U.S. labor force, which added just 12,000 workers in May following drops in the previous two months.” Year-to-date wage growth clocked in at 2.7 percent for May and relative to April 2018, wages increased by 0.2 percent. The inflation rate, which currently sits at 2.4 percent, is close to the Federal Reserve’s target rate. Tharp says that the current rate of inflation is a point of concern because it is only slightly higher …

June 4, 2018

Features Retail

C&W Analyst: New Wave of Store Closures on Deck for American Retail Market

by Jeff Shaw June 1, 2018

LAS VEGAS — Another massive spate of store closures is coming in America, and both retail landlords and operators should expect to feel the strains of an over-retailed market until the next recession, according to one of the nation’s leading analysts of retail real estate. Garrick Brown, vice president of retail intelligence at Cushman & Wakefield’s Rancho Cordova, California, office, believes that an overall economic downturn will be a key catalyst in alleviating America’s excess retail space, as a recession will push retailers that are eking out a profit over the red line. The arrival of an economic slump that reduces consumers’ disposable incomes should trigger the next wave of store closures, said Brown. The victims are bound to be retailers that have yet to distinguish themselves from their competitors in terms of either product pricing or shopping experience. Brown spoke to REBusinessOnline at ICSC RECon in Las Vegas, the world’s largest retail trade show that was held on May 20-23. In addition to laying down some tough realities for American retail, Brown noted that the next couple years are likely to see more leveraged buyouts of struggling retailers as well as a rise in food hall concepts. Brown’s edited …

June 1, 2018

Features Southeast Feature Archive

Creating a ‘Personal Experience’ is Key for Retail Landlords, Says CREC Partner

by Camren Skelton May 31, 2018

LAS VEGAS — The combination of significant population growth and a shortage of supply makes it an ideal time to develop retail projects in the South Florida market, according to Sabrina Stimming, director of retail leasing and partner at CREC, a full-service real estate firm. The population of Miami-Dade County was estimated at 2.75 million in 2017, up from 2.25 million in 2000, according to the U.S. Census Bureau. That’s a 22 percent increase over a 17-year period. However, stiff competition from e-retailers is among the biggest issues facing landlords today. REBusinessOnline sat down with Stimming at RECon, the world’s largest retail trade show held last week in Las Vegas, to discuss South Florida’s retail scene. Discussion topics ranged from store closures and backfilling vacant space to embracing internet-proof tenants for today’s shopping centers. What follows is an edited interview: REBusinessOnline: When you reflect on the past year in the South Florida retail market, is there one trend, project or hot-button issue that stands out and why? Sabrina Stimming: Store closures for sure — the continuation of some major boxes that are closing. This past year hhgregg, Winn-Dixie and Toys ‘R’ Us have all closed. That’s big stuff. Toys ‘R’ …

May 31, 2018

Content Partner Features

Credit Unions: An Overlooked Source for Commercial Real Estate Loans

by Amy Works May 30, 2018

Credit unions may not be top of mind for commercial real estate investors seeking financing. In fact, many people do not realize that these lending institutions offer commercial financing alongside a variety of consumer and residential loans. These not-for-profit organizations fundamentally operate to serve their members, typically by providing attractive yields on depository accounts and by offering lower interest rates on vehicle loans, mortgages, and yes, commercial loans. As a not-for-profit organization, a credit union essentially returns profits to its membership as opposed to shareholders. Credit unions can widely vary in their ideas about what type of services and offerings best benefit their members, notes Larry Silberman, manager of commercial loan originations with Chicago-based Alliant Credit Union. Some credit unions may focus on serving a local geographic region, while others offer loans nationwide. Some may target niche markets and employers, while others look for a diverse membership base in a local community. Alliant offers nationwide commercial real estate financing from $7.5 million to $35 million with terms up to 15 years. As a credit union with a national membership base, Alliant’s commercial lending platform has no geographical limitations. Silberman notes that for Alliant, the enhanced returns that the national commercial …

May 30, 2018

Features Heartland Feature Archive Lee & Associates Retail

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

by Jeff Shaw May 29, 2018

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 …

May 29, 2018

Features Southeast Feature Archive

GSU Economist Urges Patience as Full Impact of Tax Cuts Ripples Through System

by Camren Skelton May 24, 2018

ATLANTA — With the full effect of the tax cuts yet to be felt, any talk of a recession is ultimately premature, according to Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University’s (GSU) J. Mack Robinson College of Business. Speaking at his quarterly economic forecast, which was held on Wednesday, May 23 at GSU’s Centennial Hall Auditorium, Dhawan said the impact of the Tax Cuts and Jobs Act signed into law by President Trump last December should take hold by the middle of this year. In addition, he expects the Federal Open Market Committee (FOMC) to raise the federal funds rate, the overnight interbank lending rate, twice more in 2018: once in June then again in December. The current federal funds rate is 1.75 percent. In the interim period between those two hikes, the forecaster expects the Fed to keep a close eye on two key trends: consumer spending and long-bond yields. “First, evidence has to emerge that tax cut-induced consumer spending is finally taking hold as weak retail sales numbers in the first quarter were a snapback from a hurricane rebuilding spending surge in the last quarter of 2017,” Dhawan wrote in his quarterly Forecast …

May 24, 2018

Features Retail

Retail Sector is in Midst of Unprecedented Adaptation Cycle, Says Nadji

by John Nelson May 22, 2018

LAS VEGAS — Hessam Nadji has a simple message for the shopping center community in a tumultuous retail environment: adaptation plus innovation equals opportunity, particularly in an economy with plenty of runway left for growth. “If you take a look at the most dominant technology players that you can think of — Microsoft, Apple and Amazon — they are getting into brick-and-mortar retail every day. Why? Because physical space counts, physical location counts, presence in the community counts, foot traffic counts,” said Nadji, president and CEO of Marcus & Millichap, who delivered a forceful message Monday afternoon to a packed ballroom of several hundred attendees at the Renaissance Hotel in Las Vegas. The event, titled “Marcus & Millichap’s Retail Trends 2018,” was held in conjunction with RECon, an event hosted by the International Council of Shopping Centers (ICSC) that has attracted approximately 37,000 industry professionals and 1,200 exhibitors to the Las Vegas Convention Center. Apple currently operates more than 270 stores in the United States, followed by Microsoft with about 90 stores. Through its $13.7 billion acquisition of Whole Foods Market last year, Amazon controls about 479 stores in the United States and Europe. Conversely, the graveyard of failed retailers …

May 22, 2018

Features Retail

Phillips Edison: Pop-Up Spaces, Showrooms Reflect Evolution of Retail

by Taylor Williams May 21, 2018

LAS VEGAS — E-commerce has disrupted the market for retail real estate on a seismic level, but it has not obliterated the need for brick-and-mortar shops. Instead, the online shopping craze has functioned as an evolutionary mechanism. E-commerce has forced retail operators and landlords to both bolster their digital platforms and enhance their in-store shopping experiences. “Much has been made of the need for brick-and-mortar retail to adapt to e-commerce, but we’ve also seen a shift in the other direction with a number of e-retailers opening brick-and-mortar showrooms to complement online offerings,” said Mike Conway, vice president of national accounts and retailer partnerships at Phillips Edison. “Overall, we’re confident that the future for retail is bright, and we can’t wait to see how these trends continue to unfold.” For consumers, this evolutionary shift means that retailers are looking to interact more with shoppers in their stores. The manner in which retailers enhance the shopping experience varies from concept to concept. But some trends are beginning to emerge, according to a recent report from Phillips Edison, a REIT specializing in grocery-anchored retail properties. And the use of pop-up spaces and showrooms are two of the leading practices for retailers to consider …

May 21, 2018

California Features Multifamily Seniors Housing Western

Buckingham: Encourage Talent and You’ll Cultivate Careers in Senior Care

by Katie Sloan May 17, 2018

SAN DIEGO — Marcus Buckingham has a rather simple yet effective piece of advice for seniors housing operators: stop focusing on the negative. “We have strengths and we have weaknesses. What should you spend more time on?” he asked. “Most people are way more focused on the weaknesses and identifying flaws and fixing them. It has a lot to do with fear. We should be honoring strengths.” Buckingham, a leadership and management expert, delivered the comments to more than 2,500 seniors housing executives on May 15 at the 2018 Argentum Senior Living Executive Conference & Expo held at the San Diego Convention Center. There are currently 93,300 people working in seniors housing in the U.S., according to Argentum, an inadequate number Buckingham said. Experts note there should be a one-to-one ratio of employees to residents. Compounding matters is that more exciting industries like technology and creative professions draw the younger generations away from traditional career roles, resulting in a jobs crisis. While seniors housing may not be as sexy as the tech sector, Buckingham believes a change in attitude can do wonders for employee retention. “There is a lot of turnover in the first 90 days, but people don’t measure …

May 17, 2018

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