Features

NEW YORK — Following a turbulent year in 2016, the U.S. economy and property markets are positioned to perform well in 2017, according to Cushman & Wakefield’s U.S. Macro Forecast. Although it will take time for policy to form, Cushman & Wakefield expects that President Trump, alongside a Republican-controlled House and Senate, will deliver fiscal stimulus measures that will further boost the U.S. economy and property markets. That said, some of the expected growth in fiscal policy will be negated by tighter monetary policy, higher interest rates, higher inflation and more global volatility, according to Kevin Thorpe, global chief economist at Cushman & Wakefield notes that. Cushman & Wakefield forecasts the U.S. real GDP will grow by an upwardly revised 2.3 percent in 2017, and will hit 3 percent in 2018. The forecast predicts the following implications for the commercial real estate sector: Office: With 730,000 estimated new office-using jobs in 2016 and an additional 438,000 and 508,000 expected throughout 2017 and 2018, respectively, there is still runway for the office market. In 2016, total net absorption is forecast to end the year at 50.2 million square feet. Absorption is projected to increase to 54.9 million square feet in 2017. Vacancy …

The market for seniors housing construction financing is “pretty fickle right now,” a stark contrast from just a few years ago when the lending spigot for developers was flowing freely, according to Ari Dobkin, managing director of Meridian Capital Group. “The funny money for construction just isn’t out there anymore. Lenders are hyper-focused on the borrower’s balance sheet, their experience doing construction and their ability to successfully fill up a building,” remarked Dobkin during a capital markets update panel session at InterFace Seniors Housing Northeast in Philadelphia on Nov.  15. The daylong conference held at Hyatt at the Bellevue hotel in downtown Philadelphia attracted approximately 200 industry professionals. In addition to Dobkin, other panelists included John Randolph, senior mortgage banker, KeyBank Real Estate Capital; Frank Cassidy, vice president of originations at Berkeley Point Capital; Trace Wilson, director, Prudential Mortgage Capital Co.; and panel moderator Lee Delaveris, director of seniors housing and healthcare for RED Capital Group. Dobkin joked that in the past he has fielded some unique requests from borrowers at industry conferences, including the following: “I own a bowling alley and now I want to build a seniors housing project on top of it. Can you get me 90 …

Owners should be delighted to see the value of their property increase, but in our current tax environment, higher property values have become synonymous with higher property taxes. School districts, municipalities, counties, and other taxing units have the power to limit property tax bills by lowering their respective tax rates as property values rise. Instead of doing this, however, many taxing entities opt for a tax revenue windfall. Remarkably, as they collect this additional revenue, these same taxing units claim that they have not raised taxes because they have not increased their tax rate. This distinction has afforded taxing units a convenient escape from the ire of taxpayers. But is it fair? The Texas property tax system has two components: appraisal districts and taxing authorities. First, appraisal districts assess the market value of taxable property within their boundaries. They then participate in protest hearings initiated by property owners about those values and subsequently certify appraisal rolls for taxing entities. Second, the governmental bodies that levy and collect taxes prepare budgets and, with their certified appraisal rolls in hand, adopt tax rates sufficient to meet those budgets. Then these municipalities, school districts and other institutions send out tax bills and collect tax …

In retail, nothing remains the same for long. A century ago, America saw the rise of mega department stores as category killers. In the middle of the 20th Century, regional malls were beginning their rise. That was followed by the power centers and lifesyle centers of 1990s and 2000s. Today, experience is the name of the game; consumers would rather spend time doing what they enjoy than shopping for common goods. They strive to make every trip an experience. In some ways, it is akin to the original days of the department store and regional mall, where every turn was met with something unexpected and new. Like the entertainment industry, the shopping center industry now touts more “original content” than replication in its medium, the physical retail format. Every venue strives to be different, and in some cases chain retailers have strived to make their locations differ from one another. REBusiness Online’s sister publication Shopping Center Business recently spoke with Garrick Brown, vice president of retail research at Cushman & Wakefield, one of the foremost retail analysts in the industry, to see what trends he is watching as the industry enters 2017. Brown will be one of the keynote speakers at Entertainment Experience Evolution, February 7-8 in Santa Monica, produced by Shopping Center Business. SCB: What trends are you seeing as we move through the holiday season this year? Brown: We are definitely seeing another shift towards entertainment, …

Portfolio sales occupy their own unique category of commercial real estate transactions. The challenges, complexities and procedural nuances that make portfolio sales so distinctive also limit the number of parties that can make such purchases. In a standard commercial real estate transaction, familiar steps in a fairly standard process give prospective buyers plenty of time and opportunity to conduct their due diligence. From a buyer’s standpoint, there is little to no risk until your due diligence process is complete. You aren’t spending any money until you have the project under contract and, as long as you have the deal in hand, no one else can move on it. From the initial letter of intent through to the purchase agreement, and even up to the eventual closing, buyers can pull out of the deal for any number of reasons. Consequently, the overall obligation and financial exposure for prospective buyers is fairly minimal. Portfolio sales completely reverse the risk equation/analysis. The portfolio is marketed privately and the sale is conducted almost like a managed auction. Prospective buyers will typically submit letters of intent. Once the seller thinks they have a winner on the economics of the deal, they will move forward. Unlike a …

WASHINGTON, D.C. — The vast majority of foreign investors in U.S. real estate will either maintain or increase their level of investment from 2016 to 2017, according to a newly released survey conducted by the Association of Foreign Investors in Real Estate (AFIRE). AFIRE is a Washington, D.C.-based organization assisting and representing foreign investors, with over 200 members from 22 countries. According to the organization’s survey, 95 percent of its members will spend the same or more on U.S. real estate in 2017 as they did in 2016. Members of AFIRE are among the largest international institutional real estate investors in the world and have an estimated $2 trillion in real estate assets under management globally. The survey was conducted in the fourth quarter of 2016 by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business. City-by-City Breakdown For the seventh year in a row, New York City was named the top U.S. investment city by AFIRE’s members, and for the third year in a row was No. 1 globally. The other top five U.S. cities, in order, were Los Angeles, Boston, Seattle and San Francisco. For the first time since the survey began in 1992, Washington, …

NEW YORK — Following a turbulent year in 2016, the U.S. economy and commercial real estate markets are positioned to perform well in 2017, according to Cushman & Wakefield’s latest U.S. Macro Forecast. The report provides Cushman & Wakefield’s forward-looking stance on the U.S. economy, commercial real estate and the risks/assumptions that underlie the forecast. “Even before the election, the U.S. economic fundamentals were showing signs of heating up,” said Kevin Thorpe, Cushman & Wakefield’s global chief economist. “We observed a big GDP number in the third quarter, accelerating wage growth, surging consumer confidence — a string of really robust trends were already forming. Now when you layer in the expected tax cuts and spending multipliers from the new administration, it creates an even stronger economic backdrop for the property markets heading into 2017.” Although it will take time for policy to form, Cushman & Wakefield expects that President-elect Trump, alongside a Republican-controlled House and Senate, will deliver fiscal stimulus measures that will further boost the U.S. economy and property markets. That said, Thorpe notes that some of the expected growth in fiscal policy will be negated by tighter monetary policy, higher interest rates, higher inflation and more global volatility. …

Working with CBRE’s vast clien­tele of retailers and developers, Melina Cordero, the compa­ny’s head of retail research for the Amer­icas, is constantly delving into trends and how they convert to dollars and cents. REBusiness Online’s sister publication Shopping Center Business recently met with Cordero to find out what trends retailers, shopping center owners and developers, and CBRE’s retail brokers are asking her to look into to get a glimpse of some national trends on the horizon. SCB: You spend a lot of time focusing your energy on trends for CBRE’s people in the field — and their clients. What are they asking you to look at today? Cordero: Today, it’s not just retail clients, it’s also clients who are thinking about incorporating retail into projects. They all want to know about placemaking. A lot of people are saying, ‘We know that we need to create these great places.’ To them, that is about curating a special mix of retailers, restaurants, entertainment, open spaces and other uses. There are no guidelines, rules or metrics for that. A lot of it is what is placemaking; how to create a destination; and what has worked for others? They ask us a lot to …

Streetscapes create a sensation of depth and charm that beckon to passersby. People are drawn to lush landscapes, open green spaces and great tree canopies. They feel welcomed in these spaces and want to share them with others. Many new developments aim to provide streetscapes and open spaces that create holistic connections, enhancing their projects with authenticity and community. Here are some insights into how to create these. Building Community Through Authentic Connections + Open Spaces Strategically integrating retail and open spaces brings benefits beyond the satisfaction of the immediate customers. It contributes to the entire district or neighborhood as these elements are knit into the urban fabric. Thoughtful planning should address more than tenant mix and leasable space; it needs to consider quality of open space and the surrounding environment. Today’s consumer has an appetite for quality. Young professionals are flocking to new developments that support a work-life balance. An individual who lives or works near a new development can bring his or her family and friends to dine, shop, run errands, and play, extending their time spent together and within the development. Retail can benefit from this type of place-making by creating destinations that people want to stop and use …