Features

The retail sector of commercial real estate continues to recover strongly, but the economic improvement is not universal and lags behind other property types, according to Integra Realty Resources (IRR). In its annual Viewpoint study, the commercial real estate valuation, consulting and advisory firm reports that all but one of the major U.S. markets it tracks are in either the recovery or expansion phase of the real estate lifecycle. One city — Greensboro, N.C. — is in the final phase of recession, and no markets are currently experiencing hypersupply. Notably, Atlanta became the last huge market to leave the recession phase and officially enter recovery. Only New York is in the last stage of expansion, leaving the vast majority of tracked markets in late recovery or early expansion stages. Although the news is positive, retail’s recovery is slower than the other real estate sectors. Multifamily, for example, has all but three markets currently in the expansion phase. Patrick Kerr, a senior managing director for IRR in Washington, D.C., says retail is one of the slower sectors to rebound because it’s location-based more than other sectors. This leads to fewer variables to lead to recovery. “The variables are pretty constant in …

By Nellie Day Integrating retail with entertainment districts and sports venues dominated the stage on Feb. 19 at InterFace’s “Entertainment Experience Evolution” conference at the JW Marriott LA Live. Executives from sports and entertainment provider companies, Major League Baseball teams, development firms, architects and REITs came together to offer the best advice they’d received when undertaking some of their most ambitious projects. The diverse group also shared the lessons they wished they’d learned the easy way. Below is a compilation of their best advice. 1. Test the Market —Innovative concepts and new-to-market retailers have to start somewhere, but their big break doesn’t need to involve a risky lease neither side is confident it can fulfill. That’s where incubation comes in. “We are bringing shipping containers to the ballpark to test out concepts,” said Larry Baer, CEO of the San Francisco Giants and a participant in the “Leading the Way” panel. “We want to maximize our investment, and we can create an urban environment with great amenities. Big national chains don’t really work in retail in San Francisco the way they do in other communities. That’s why we do lots of incubation.” The pop-up shipping container village called The Yard at …

For the 18th time in 20 months, the delinquency rate for U.S. CMBS loans 30 days or more past due has decreased. The Trepp CMBS Delinquency Rate fell nine basis points from December to January to 5.66 percent. What’s more, the delinquency rate is now 159 basis points lower than it was in January 2014 when it stood at 7.25 percent Across property types, lodging continues to be the best performing asset class, with a delinquency rate of 4.40 percent, down 37 basis points in January, according to New York-based Trepp, which closely tracks the CMBS industry. The industrial delinquency rate saw the second-largest decrease last month, with a 35-basis-point drop to 7.2 percent. The office delinquency rate was the only major property type to increase in January, with a 10-basis-point increase to 6.18 percent. CMBS loans that were previously delinquent but paid off either at par or with a loss totaled almost $1.2 billion in January, according to Trepp. Removing these previously distressed assets from the equation helped lower the rate down by 22 basis points. More than $500 million in loans were cured in January, which helped push delinquencies lower by 10 basis points. At the same time, …

The accelerating labor market is bound to stoke tenant demand for all types of commercial real estate, says Robert Bach, director of research for the Americas at brokerage services firm Newmark Grubb Knight Frank. The veteran economist’s assessment comes on the heels of a better-than-expected Bureau of Labor Statistics (BLS) report released last Friday that shows U.S. employers added 257,000 net new payroll jobs in January, beating the 230,000 jobs forecast by Bloomberg in its survey of economists. In another sign of momentum, the November and December totals were revised upward by a combined 147,000 jobs. Monthly revisions result from additional reports received from businesses since the last published estimates and the monthly recalculation of seasonal factors, according to the BLS. The annual benchmark process also contributed to these revisions. The strong performance in January and revisions to the prior two months lifted the three-month moving average to 336,000, its highest level since November 1997, according to Bach. The annual benchmark revisions to the data, completed every January, raised 2014 job growth from 2.9 million to a 15-year high of more than 3.1 million jobs. “Job growth last month beat analysts’ forecasts, which was unexpected given that analysts had overestimated …

NEWARK, N.J. — Prudential Mortgage Capital Co. (PMCC) provided $15.2 billion in financing to the commercial real estate industry globally in 2014, exceeding expectations but down slightly from $15.8 billion in 2013. Despite the slight pullback overall, the company provided more than $3 billion in conventional agency loans in 2014, the highest production volume in the firm’s history. PMCC — the commercial mortgage lending arm of Newark-based Prudential Financial Inc. (NYSE: PRU) — unveiled the results Tuesday during the Mortgage Bankers Association’s 2015 Commercial Real Estate Finance (CREF)/Multifamily Housing Convention & Expo at the Manchester Grand Hyatt in San Diego. In addition to achieving a record year for agency lending in 2014, PMCC reported strong production in general account volume and CMBS transactions. The company — which exceeded its projected goal of $14 billion for 2014 — has as much as $15 billion available for financing in 2015. Among the highlights for PMCC in 2014: Portfolio lending in the U.S. totaled $7.9 billion, while portfolio lending internationally (Japan, the United Kingdom and the rest of Europe) totaled $700 million. CMBS originations on behalf of PMCC’s Liberty Island conduit program reached nearly $900 million. International assets under management grew to more …

SAN DIEGO — The Mortgage Bankers Association (MBA) projects that originations of commercial/multifamily mortgages will grow to $414 billion in 2015, an increase of 7 percent over the prior year. Furthermore, MBA expects total loan originations will rise to $430 billion in 2016. The loan originations outlook was released Monday during MBA’s Commercial Real Estate Finance (CREF)/Multifamily Housing & Convention Expo 2015, which runs from Feb. 1-4. There are 3,100 attendees at this year’s conference at the Manchester Grand Hyatt in San Diego, up from 2,800 in 2014 and the highest attendance figure since 2008 when the conference drew 3,900 attendees. The MBA forecast is based on the expected level of deal volume among mortgage banking firms. “Commercial and multifamily real estate finance markets are strong,” says Jamie Woodwell, vice president of commercial real estate research for the MBA. “Rising property values, improving property fundamentals, lower interest rates and higher loan maturity volumes should all help boost mortgage borrowing and lending in the coming year.” Multifamily mortgages originated by mortgage bankers are forecast to total $152 billon in 2015. The commercial/multifamily mortgage debt outstanding is expected to continue growing in 2015, ending the year at $2.7 trillion, up more than …

ATLANTA — Billionaire entrepreneur and legendary media mogul Ted Turner, who along with Coca-Cola and Delta Air Lines helped put Atlanta on the map, captivated a packed house at restaurant 103 West on Wednesday afternoon during the annual luncheon of the Buckhead Coalition. Business and political leaders from across Atlanta and Fulton County gathered to hear the 76-year-old, straight-talking Turner reflect on his life and career during a one-on-one interview with Sam Massell, president of the Buckhead Coalition and former mayor of Atlanta from 1970-74. Turner didn’t disappoint. He and Massell bantered back and forth for 20 minutes, leaving the audience hungry for more. The Background Turner began his career as an account executive with the Turner Advertising Co., which made a substantial profit selling billboard ads. In 1970, he entered the television business when he acquired an independent UHF station. In 1976, Turner purchased Major League Baseball’s Atlanta Braves and launched the TBS Superstation, originating the “superstation” concept. The following year, Turner Broadcasting System Inc. acquired the National Basketball Association’s Atlanta Hawks and in 1980 Turner launched CNN, the world’s first live, 24-hour global news network. Over the next two decades, the company built a portfolio of cable television …