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

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

Features Retail

Architecture Aids in Retail Branding

by Katie Sloan May 15, 2018

As brick-and-mortar retail centers evolve to compete with online retailers, architects are helping developers and tenants with the evolutionary process. Shopping Center Business, sister publication to REBusinessOnline, asked four architects for their insights about how developers and retailers are grappling with the questions of branding. Sharing their thoughts are Sean Selby, principal with Boston-based Arrowstreet; Simon Perkowitz, principal with Irvine, California-based KTGY Architecture + Planning; Jim Baeck, principal with Baltimore-based Design 3 International (D3i); and Frankie Campione, principal and creative director of New York City-based CREATE Architecture Planning & Design. REBO: Specific to architecture, how is retail branding evolving? Selby: The days of retailers being all things to all customers are over. Retailers are discovering that if they focus on their core mission and what they do better than everyone else, they’re more successful. For example, L.L. Bean is regarded as the greatest outdoor outfitter in the world, supplying their customers with all the gear needed to hike, paddle, and play outside. Arrowstreet has helped L.L. Bean roll out a number of stores across the country in a variety of locations and settings. Walking through their stores is like walking through one of their catalogs. Barnboard walls, fish tanks stocked with brook …

May 15, 2018

Features

Full Impact of Extremely Low Unemployment Rate Yet to Be Felt, Economists Say

by Camren Skelton May 10, 2018

WASHINGTON, D.C. — The U.S. economy added fewer jobs than anticipated in April, but the unemployment rate reached its lowest point in 17 years, according to the latest nonfarm payroll employment report released by the Bureau of Labor Statistics last Friday. Total employment rose by 164,000 in April, slightly lower than economists’ predictions, but better than a comparatively lukewarm March. But the biggest takeaway from the latest figures was the jobless rate, which fell to 3.9 percent in April after sitting at 4.1 percent for six consecutive months. To dissect the latest jobs figures and some of the underlying trends, REBusinessOnline reached out to three real estate economists: Ryan Severino, chief economist of JLL; Ken McCarthy, principal economist and head of applied research for the U.S. at Cushman & Wakefield; and Steve Hovland, CEO of Hovland Real Estate Consulting. What follows are their edited responses. REBusinessOnline: Which headline number in the April jobs report released Friday, May 4 by the U.S. Bureau of Labor Statistics is more significant in your view — the 164,000 increase in non-farm payroll employment or the dip in the unemployment rate to 3.9 percent, the lowest in 17 years? Please explain. Ryan Severino: The unemployment …

May 10, 2018

Features Heartland Feature Archive Michigan Midwest

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

by Kristin Harlow May 8, 2018

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 …

May 8, 2018

Features Heartland Feature Archive Northeast Feature Archive Southeast Feature Archive Texas & Oklahoma Feature Archive

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

by David Cohen May 3, 2018

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 …

May 3, 2018

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