Features

By Haisten Willis With the completion of the Panama Canal expansion on the horizon, REITs could reap the benefit of asset exposure to the U.S. ports that stand to immediately benefit from the canal's increased traffic. Ports along the Gulf of Mexico and the East Coast of the United States are prepping for the opening of the expanded Panama Canal. The project is expected to be completed in early 2016 and will cost an estimated $5.25 billion. The new system of locks will allow new ships to pass through that will be capable of hauling at least two-and-a-half times the cargo of vessels using the canal today. It is estimated that container traffic will increase 5 percent to 15 percent in ports that can accommodate the new ships, according to a July 8 article in The Wall Street Journal. With expected increases in cargo volume for U.S. ports, the Journal reported that several major U.S. ports have been preparing to accept the new supersized ships. Six of the top 25 ports for waterborne foreign trade by metric ton volume in 2013 are taking measures to ensure immediate benefit from the expansion. The port of Houston was ranked first for waterborne …

By Haisten Willis Shale zone communities have discovered another benefit from their surging economic growth: more of everything. Small towns like Williston, North Dakota, which has relatively little retail, are now catching the eye of major brands like Whole Foods Market and Trader Joe's. With $80 billion expected in annual investments over the next six years and rapid population expansion, local infrastructure construction and real estate development in shale formation areas like the Bakken in North Dakota and Eagle Ford in Texas are turning small outposts into genuine boomtowns. According to JLL’s 2014 North American Energy Outlook, major metropolitan areas are benefitting too, with “surge cities” fuelled by oil and natural gas production growing at more than twice the pace of their peers. “The energy boom is having a dramatic effect on the infrastructure of these boomtowns and on the economies of the hubs that support the oil and gas business,” says Bruce Rutherford, international director and head of oil and gas practice for JLL. “Sites like Williston and Midland, Texas, or Hobbs, New Mexico in the Permian Basin are having a tremendous influx of workers, and those workers need to eat, they need places to shop and they need …

By staff reports NEW YORK — With vacancy rates and speculative construction back to pre-recession levels, the U.S. industrial sector at mid-year 2014 continues to lead the country’s commercial real estate recovery, according to Cushman & Wakefield. The commercial real estate services firm released its second-quarter industrial market analysis, which also shows strong occupancy gains and rising rental rates in the face of diminishing big-box supply. “With demand for goods from consumers and businesses rising at a healthy pace, e-commerce sales rising by 15 percent a quarter, and manufacturing production and shipments increasing, the national industrial market has, indeed, entered a time of significant growth and progress,” says John Morris, leader of industrial services for the Americas at Cushman & Wakefield. The U.S. industrial vacancy rate continued to compress during the second quarter to 7.2 percent, 80 basis points lower than one year ago and the lowest level since the first quarter of 2008. This is a significant departure from the recent high of 10.8 percent posted during the first quarter of 2010. Two California markets currently have the lowest industrial vacancies in the nation: the San Francisco Peninsula (3.7 percent) and Orange County (3.9 percent). Net demand remained strong …

By Nellie Day FAIRFIELD, CALIF. — The City of Fairfield’s industrial supply has been feeling a little crushed lately as wine-related companies snatch up space at a record pace, thanks to its close proximity to Napa Valley’s wine region. More than 2.5 million square feet of this 37.6 square-mile town is occupied by wine-related businesses, 1 million of which was absorbed during the past year alone. “Fairfield's real estate prices are significantly less expensive and its building fees are one of the lowest in the San Francisco Bay Area,” explains Charles Ching, the city’s economic development specialist. “The city has excellent transportation access to ports, rail and airports. It is bisected by Interstates 80, 680, and Highway 12, making it a good trucking zone and allowing companies to daily move their products on north-south and east-west corridors.” The city’s infrastructure, location and reasonably priced rents have given many wine-related companies reason to celebrate. Fairfield has become so attractive to this industry, in fact, that many companies have chosen to relocate from nearby cities. Encore Glass, a wine bottle supplier, moved its operations from Benicia, 20 miles south of Fairfield, to a 318,000-square-foot building that was just opened by Buzz Oates …

By Trip Stephens, CIO of ZOM In the aftermath of the housing bubble a few years back, many Americans have changed their views on homeownership. Homeownership rates have dropped from a peak of 69.4 percent in 2004, to just 64.8 percent today — the lowest level the U.S. Census Bureau has reported in 15 years. Demographic shifts are also influencing tenure choice. People in the expanding 25-34 year age group want to live closer to work, be more socially engaged with their peers and prefer the freedom and flexibility of renting instead of owning. Many are also less inclined to own a car. A growing segment of these younger renters are also drawn to top-tier U.S. cities, which offer higher paying jobs, more attractive public spaces and cultural venues and 24-hour lifestyle environments. These trends are driving a surge in demand for higher density, urban apartments, many of which will be developed in mid- and high-rise formats due to land scarcity in the best urban locations. Check Your 'Walk Score' How are developer’s capitalizing on this notable shift in demand? It’s all about location. When developers decide to build a high-rise, they are looking for an extremely attractive location, because …

By Scott Reid Private sector employees in June added 262,000 jobs and government agencies added 26,000 positions, for a net gain of 288,000 new jobs that will potentially have a substantial impact on commercial real estate, according to a Marcus & Millichap report. During June, the unemployment rate fell to 6.1 percent from 6.3 percent in May, reaching its lowest level since September 2008. According to the commercial real estate services provider, these new jobs will create demand for rental housing, strengthening the 20 basis-point rise expected this year that will bring the national vacancy rate to 5.2 percent. Marcus & Millichap predicts that growth in degreed professional and business service fields, as well as those in the financial services, will fill vacant office space and generate demand in the remaining quarters of this year. An increase in office property operations will result in a 120 basis-point drop in U.S. vacancy to 14.8 percent this year. Robert Bach, director of research for the Americas with Newmark Grubb Knight Frank, says the growth was “robust.” He also believes the increase in jobs in the sectors most important to commercial real estate will support net operating incomes as space is filled and …