Features

Report: Net Lease Investment Market Heats Up During Third Quarter

by Taylor Williams November 9, 2017

TULSA, OKLA. — Sales of net leased properties settled in at nearly $11.4 billion during the third quarter of 2017, up 15 percent over the average for the past five third quarters ($10 billion), according to a recent report from Stan Johnson Company, a national brokerage and advisory firm specializing in net leased assets. The report tracks net leased properties across the office, industrial and retail real estate sectors. “This was the largest third-quarter move in six years and represents resilience in the net lease sector,” says John Zimmerman, director of Tulsa-based Stan Johnson Company. “We may be on our way to another record sales year.” The total is the highest quarterly sales volume in the past 12 months and follows a lackluster second quarter that saw investment sales volume drop more than 20 percent below the average for the past five second quarters. Growth occurred across all net lease sectors, with office, industrial and retail increasing 35 percent, 43 percent and 55 percent, respectively. The results were overwhelmingly driven by growth in the sheer number of transactions — more than 750 — as opposed to the amount of the assets traded. “In recent years, a lot of the growth …

November 9, 2017

Features Top Stories

Economists: Job Growth Strong, But Expect Slow Wage Growth as Inflation, Labor Participation Remain Low

by Taylor Williams November 7, 2017

The U.S. economy added 261,000 new jobs in October, its highest monthly total of 2017, according to the latest report from the U.S. Bureau of Labor Statistics (BLS). The revised numbers suggest that the U.S. economy has recovered well from hurricanes Harvey and Irma, as evidenced by strong growth in the construction and leisure and hospitality sectors. In addition, the overall unemployment rate dropped to 4.1 percent, down 70 basis points from 4.8 percent at the beginning of the year. However, overall labor participation rate continues to dwindle, driven by a growing number of retirees and misalignments between employees’ skill sets and employers’ demands, according to economists. All of these forces — plus low inflation — point to sluggish wage growth, which has only increased by 2.4 percent during the 12-month period ending in November 2017. REBusinessOnline contacted three economists to get their takes on what these factors mean for the overall jobs market on both individual and collective levels: Ryan Severino, JLL’s chief economist; Steve Hovland, HomeUnion’s director of research; and Ken McCarthy, Cushman & Wakefield’s principal economist. Their edited responses are as follows: ReBusinessOnline: Economists polled by MarketWatch expected the U.S. economy to generate a net gain of …

November 7, 2017

Features Industrial Texas Texas & Oklahoma Feature Archive

Logistics Consultant: Role of Air, Rail Transit Expands in Industrial Market

by Taylor Williams November 6, 2017

HOUSTON — As the growth of e-commerce continues, its impacts on logistics and operations within the industrial real estate sector become more significant. Recent data from supply chain consulting firm Tompkins projects that by 2020, the value of America’s cross-border e-commerce sales will be approximately $486 billion. In addition, the value of cross-border purchases via e-commerce will total about $140 billion. To meet the e-commerce demand, industrial developers will have to supply about 160 new logistics facilities spanning 800,000 square feet in top urban markets, according to Tompkins. Another 100 or so facilities in the 75,000- to 100,000-square-foot range will need to be repurposed to support delivery to secondary and tertiary markets. Distributors in the e-commerce era have long since learned to compress their supply chains and look for logistical opportunities to save on “last-mile” expenses. To that end, industrial operators are increasingly looking to air and rail transit as distribution channels. Steve Schellenberg, vice president of business development for IMS Worldwide Inc., a logistics consulting firm for the industrial real estate sector, discussed the rise of intermodal transit during the InterFace Houston Industrial conference on Oct. 31. Approximately 115 industrial real estate professionals attended the event, which was held …

November 6, 2017

Features Top Stories

InterFace On-Campus Housing Brings Focus to Generation Z, Successful 3Ps

by Katie Sloan November 2, 2017

PHILADELPHIA — Over 240 leading figures in on-campus student housing gathered last week for the 5th annual InterFace On-Campus Housing conference at the Loews Hotel in Philadelphia. Each year, the conference brings together a cross-section of all the stakeholders in on-campus housing, from academic institutions to developers, owners and vendors. The first day of the conference, Oct. 24, began with on-campus tours of Drexel University and the University of Pennsylvania, where attendees were able to visit The Summit at University and Chestnut Square by American Campus Communities at Drexel University, and New College House at the University of Pennsylvania. In lieu of the tour, attendees were also able to attend facilitated discussions on incorporating retail into student housing and key issues and trends on-campus. Both events were followed by a successful cocktail reception. Day two kicked off with speed networking, a popular event which provides attendees a venue to meet fellow industry experts in short, one-minute conversations designed to spark conversation and grow new relationships. Keynote speaker Michael Wood, youth expert with The 747 Group, continued the day with a deep look into the differences and similarities between generations from the baby boomers forward, and provided a look into important factors to …

November 2, 2017

Affordable Housing Features Top Stories

Not-So-Affordable Affordable Housing: Low Cap Rates, Funding Challenges Impact Niche Sector

by Katie Sloan October 31, 2017

Always on the lookout for new yield-producing products, commercial property investors have turned affordable housing into the latest hot alternative real estate asset. Backed by government subsidies and incentives, affordable housing investments provide the relative safety and income of a high-yield Treasury bond or net-lease investment, which is hard to pass up in the crowded field that has driven up conventional property prices. “A lot of cash buyers and funds have come into the affordable housing market. They see it as a stable asset class,” says Heidi Burkhart, founder and president of New York-based Dane Real Estate, an affordable housing brokerage that has closed some $1.5 billion in transactions since 2008. “It’s a cool time to be in affordable housing; it’s a hot topic.” It’s going to get hotter. Economic and cultural trends portend a shortage of the product for years to come as college debt, unpredictable job creation, high home prices, rising rents and other variables are blocking home ownership and weighing down renters, according to observers and Affordable Housing: Emerging Asset Class, Global Investment Possibilities, a report issued by CBRE in July. In New York City, some 54 percent of renters in 2015 were “cost-burdened,” paying more than …

October 31, 2017

Features Retail Top Stories

ICSC: Retail Investors Optimistic Despite Negative Headlines

by Camren Skelton October 26, 2017

ATLANTA — There are still a lot of question marks in the frontier of e-commerce versus brick-and-mortar retail. But investing in strong anchor tenants and delivering to the needs of the end-user are key to maintaining and developing a successful center, according to panelists at International Council of Shopping Centers’ Southeast Conference & Deal Making event. The comments were made during the “Capital Markets, Retail Disruption, Rates, Maturities, Bankruptcies, Policy and Amazon” panel at the event, which was held Oct. 17-19 at the Cobb Galleria Centre in Atlanta. Caitlin Griffin, vice president of transactions at Brixmor Property Group, moderated the panel, which included Francine Glandt, senior vice president of REIT Banking Group at SunTrust Bank; Lauren Holden, senior vice president of Clarion Properties; Joel Murphy, CEO and co-founder of New Market Properties LLC; and Jake Nawrocki, CFA, president of Newport US RE. Although transaction volume is down 23.4 percent year-over-year, according to third-quarter research from JLL, retail demand and development pipelines remain steady. “The challenge for [buyers] is where to invest the capital that they are able to raise,” said Glandt. “The prices that they want to pay for what they want aren’t necessarily lining up with where the market is …

October 26, 2017

Features Heartland Feature Archive Midwest Northeast Northeast Feature Archive Southeast Southeast Feature Archive Texas Texas & Oklahoma Feature Archive Top Stories Western

Forecast Survey: What’s Your Take on Real Estate in 2018?

by John Nelson October 24, 2017

France Media, Inc. is conducting a brief online survey to gauge market conditions, and we welcome your participation. This survey should only take a few minutes to complete. Questions range from property sectors that your firm is most bullish on heading into 2018 to trends in deal volume to the outlook for interest rates. The results will be collated and published in the January 2018 issue of our regional magazines. Conducting these surveys is part of our mission at France Media to provide readers with indispensable information. To participate in our broker/agent survey, click here. For developers/owners/managers, click here. For lenders and financial intermediaries, click here. (Note: Please remember to click on “done” to properly submit the survey.) Sincerely, Matt Valley Editorial Director, Real Estate Regionals France Media, Inc.

October 24, 2017

Features Northeast Feature Archive Office Top Stories

Office Tenants Prefer Dynamic Workspace with Amenities, Says Coldwell Banker Survey

by John Nelson October 19, 2017

MADISON, N.J. — Physical office space can have a positive influence on its tenant base, which ultimately helps companies attract and retain employees, according to a new survey conducted by Coldwell Banker Commercial Affiliates, a Madison-based company made up of independently owned and operated commercial real estate service practices. The survey uncovered which popular office amenities resonated with respondents to see how office spaces could further improve the functionality of their square footage. “Offices are becoming a center for social activity, and it is important for office commercial real estate to accommodate this,” says Fred Schmidt, president and COO of Coldwell Banker Commercial Affiliates. Working on behalf of Coldwell Banker, Harris Poll surveyed 2,001 adults from Aug. 15-17 as part of the online study. The participating cohort included younger Millennial workers (age 18-29), older Millennials (30-34), Gen Xers (ages 35-49) and Baby Boomers (50-69), to identify worker attitudes toward their current physical workplace and better understand how office space can be optimized to meet worker needs and comfort. The highest concentration of respondents identified themselves as Baby Boomers (a little over 44 percent), followed by Gen Xers, younger Millennials and older Millennials. Overall, the survey found that the most coveted office …

October 19, 2017

Features Office Top Stories

Strong Tech Sector, Robust Construction Pipeline Influence U.S. Office Fundamentals, Says Cushman & Wakefield

by Camren Skelton October 17, 2017

CHICAGO — A strong tech sector and the effects of a robust construction pipeline influenced U.S. office fundamentals during 2017’s third quarter, according to Cushman & Wakefield. The commercial real estate services firm today released its third quarter statistics, which demonstrated that nationally markets remained stable during the past three months. Overall, though, the strength of these and additional top markets — including Midtown Manhattan and Dallas — was offset by significant negative absorption elsewhere. Out of the 87 markets tracked by Cushman & Wakefield, 27 markets posted a combined total of 5.3 million square feet of negative absorption during the third quarter, a third more than the 3.4 million square feet of negative absorption recorded in the second quarter. “The flow of tenants into new construction is beginning to impact fundamentals in some markets,” says Greenwood. “Developers delivered more than 11 million square feet of office space nationwide during the third quarter. The pipeline of new product is and will remain an important influence on the U.S. office market for the balance of 2017 and beyond.” Currently, Cushman & Wakefield tracks approximately 104 million square feet of new office development — representing 2 percent of total U.S. office inventory — in …

October 17, 2017

Features Healthcare Top Stories

InterFace Panel: Healthcare Operators Eye Retail Properties

by Taylor Williams October 12, 2017

DALLAS — Fueled by a growing population, a healthy flow of capital from a variety of investment sources and an emerging emphasis on quickness of delivery of services, the American healthcare real estate market is poised for expansion. The heightened demand for both new and old healthcare properties is forcing operators in the sector to consider alternative locations. Healthcare operators are thus finding new real estate opportunities from emerging trends in other property classes, like the spates of store closures in the retail market and the rising popularity of the mixed-use development. For their part, owners and developers of retail and mixed-use assets are embracing the growth of the healthcare sector, whether that means repurposing a strip center to be anchored by a healthcare tenant or integrating a wellness component into blueprints for a new mixed-use project. A quintet of healthcare real estate professionals who represent the provider side of the market came together at the InterFace Healthcare Real Estate conference on Sept. 14 to assess this practice and its future implications on the market. Held at the Westin Galleria hotel in Dallas, the daylong event drew about 240 attendees. Panelist Sid Sanders, senior vice president of real estate management …

October 12, 2017

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