Features

By Scott Reid Manhattan Software, a provider of Integrated Workplace Management Systems (IWMS), recently released Manhattan Analytics (MA), making it available to over 500 corporate clients in the industrial, financial, technology, media, healthcare and energy sectors in 140 countries on five continents. Nearly half of the company’s client base resides within the Fortune 1000. CIO Review ranked Manhattan Analytics among the top 100 data-analytics advances of 2014 for all industries. Craig Gillespie, CEO of Manhattan Software, explains that Manhattan Analytics is the first CRE enterprise system to offer comparative analytical capabilities. “Manhattan Analytics solves a long-running need where we allow all opt-in clients to benchmark against a database of peer organizations in real time on an aggregated level,” he says. “The benchmarking is tied to multinational organizations that are already Manhattan Software clients, so they can leverage higher ROI on their Computer Aided Facilities Management (CAFM) and IWMS investments with Manhattan Analytics.” Without platforms like MA, companies would be severely hampered by a lack of transparency that is critical for well-informed management of their real estate portfolios. That’s because IWMS- and CAFM-based systems that drive MA in real time have information detailing location, occupancy, space utilization, lease terms, size, total …

By Scott Reid The U.S. labor market has been remarkably consistent in its unremarkable performance, observes Robert Bach, director of research for the Americas with Newmark Grubb Knight Frank, following last Friday’s announcement by the Bureau of Labor Statistics (BLS) that total nonfarm payroll employment rose by 217,000 in May. “Growth has been strong enough to chip away at the slack in the supply of labor, but not strong enough to reverse the cautious psychology that persists among households and some businesses,” wrote Bach in a June 6 research note titled “Back in the Black.” With the 217,000 net new payroll jobs created in May, the U.S. labor market finally recovered all of the 8.7 million jobs lost to the Great Recession. The national unemployment rate remained unchanged at 6.3 percent, the lowest level since September 2008. “A welcome milestone, it is also a sobering reminder that the labor force has grown by 1.7 million workers since the recession began with virtually no new jobs created for them to fill, which has kept the unemployment rate above the long-term equilibrium rate of 5.5 percent,” said Bach. “These totals do not count millions more who have dropped out of the labor …

By Matt Valley The second half of May was an especially busy time for DDR Corp., the Beachwood, Ohio-based real estate investment trust (REIT) that owns and manages a portfolio of primarily large-format power centers in 39 states and Puerto Rico. DDR hosted more than 1,000 meetings with retail real estate executives and assorted shopping center industry professionals at the Bellagio Hotel in Las Vegas during RECon 2014. The three-day convention, which took place May 19-21 at the Las Vegas Convention Center, attracted more than 33,000 attendees from across the globe. “The overriding theme for me coming out of RECon was the continued robust demand [for space] we’re seeing from the best-in-class retailers, specifically in the power center format,” said Paul Freddo, senior executive vice president of leasing and development for DDR Corp. during an investor presentation at REITWeek 2014 in New York City in early June. Added Freddo: “The question we get from these retailers who obviously we are dealing with on a daily basis is, ‘How can you help me grow? How are you going to find me space in your centers, the centers I want to be in, and how do you get creative in doing it?’” …

ATLANTA — The U.S. lodging industry is expected to achieve an occupancy level of 63.6 percent in 2014, topping the pre-recession peak of 63.1 percent reported by STR Inc. in 2006. That’s the latest forecast from Atlanta-based PKF Hospitality Research. Given this favorable balance between supply and demand, Mark Woodworth, president of PKF Hospitality Research, predicts that hotel owners and operators will begin to see a real (inflation-adjusted) recovery in average daily rate (ADR) and net operating income (NOI). “The domestic hotel industry is operating at peak performance. We can stop using the term ‘recovery,’” emphasizes Woodworth. “The U.S. lodging industry is at a place in the business cycle where a confluence of market and operational factors will lead to impressive performance on both the top and bottom line. In 2014 and 2015, our firm is forecasting several all-time highs for some of the most important metrics in the hotel business.” By year-end 2015, PKF projects that the U.S. lodging industry will have achieved the following milestones: • A fourth year of accommodated demand in excess of the pre-recession peak of 11.3 million room nights • Six consecutive years of increasing occupancy, the longest such streak since 1988 • An …

By Matt Valley LAS VEGAS — Sprouts Farmers Market Inc., the publicly traded Phoenix-based specialty grocer with an ambitious growth plan, is coming to the Peach State. The first of four Sprouts stores in metro Atlanta will open June 18 in Snellville, followed by more openings later this summer in Dunwoody, Norcross and John’s Creek. “We’re a chain of 172 units. We’ll be at 191 at the end of this year, but our long-term [goal] is 1,200 units,” said Ted Frumkin, the company’s senior vice president of business development. “We have our work cut out for us.” Frumkin’s comment came Monday evening during “Retail Trends 2014,” a panel discussion moderated by Bill Rose, vice president and national director of the retail group at Marcus & Millichap. Hessam Nadji, senior vice president and chief strategy officer for Marcus & Millichap, provided a largely upbeat outlook for the U.S. economy and retail real estate. The panel discussion took place at the Renaissance Hotel during RECon 2014, the International Council of Shopping Centers’ annual global trade show that attracts more than 33,000 industry professionals. Sprouts (NASDAQ: SFM) provides high-quality natural and organic products at prices the everyday grocery shopper can afford, according to …

By Nellie Day LAS VEGAS — Some of the nation’s largest shopping center owners and managers took a break early this week from discussing the physical attributes of their properties to focus on their technological infrastructure during RECon 2014 at the Las Vegas Convention Center. While the shopping center is still the priority, much of the conference’s talk so far has focused on the properties’ unseen attributes — its Wifi capabilities, omni-channel presence, appreciation for social media, data analysis, sophisticated information technology systems — in the quest to get more shoppers in the store and ring up more sales. “It takes a huge shift in thinking to say that we as a property, or we as an owner, value technology enough that we’re going to make an investment because we believe that investment is going to keep bringing customers to our shopping centers,” said Corbett Guest, CEO of Dallas-based Imaginuity, a digital marketing agency that works with business-to-business and business-to-consumer companies. “If you just throw a bunch of money at different things and hope they stick, you’re going to spend a whole bunch of money,” said Guest. Therein lies the problem that panelists addressed during an educational session, titled The …

By Matt Valley LAS VEGAS — City Creek Center, a mixed-use development in the heart of Salt Lake City, is this year’s VIVA Best-of-the-Best Award winner in the sustainable design/development category, the International Council of Shopping Centers (ICSC) announced Sunday. The VIVA Best-of-the-Best Awards presentation at the Las Vegas Convention Center capped the opening day of RECon. More than 33,000 retail and shopping center professionals from across the globe are gathered here this week to network, do deals and partake in educational sessions. The largest convention of its kind in the industry, RECon also features 1,000 exhibitors. The VIVA Best-of-the-Best Awards recognize the most outstanding examples of shopping center design and development, sustainability, marketing and community service worldwide. VIVA stands for “vision, innovation, value and achievement.” City Creek Center, which opened in 2012, is owned and managed by Bloomfield Hills, Mich.-based Taubman Centers Inc. (NYSE: TCO).Taubmanco-developed the center with City Creek Reserve Inc., the real estate arm of the Church of Jesus Christ of Latter-day Saints. Callison served as the design architect on the project, while Hobbs + Black Architects served as the production/executive architect. The mixed-use project is a 20-acre urban redevelopment of two city blocks. “City Creek is …

By Matt Valley The U.S. economy appears to be gaining traction, boosting the outlook for the commercial property leasing market in the coming quarters, says Robert Bach, director of research for the Americas at real estate brokerage firm Newmark Grubb Knight Frank. Emerging from their winter hibernation, employers added 288,000 net new payroll jobs in April, according to the Bureau of Labor Statistics (BLS), easily beating economists’ expectations of 220,000 jobs. The severe cold and heavy snow blamed for the meager U.S. GDP growth of 0.1 percent in the first quarter of 2014 is now a distant memory. The BLS also revised the February and March data higher by a combined 36,000 jobs, putting the labor market within reach of a new peak that would erase all recessionary job losses, according to Bach. That new peak could occur as early as the next payroll employment report due to be released by the Bureau of Labor Statistics in early June. The job gains in April were widespread. Among the highlights: • The three primary office-using sectors — information, finance, and professional and business services — added a combined 78,000 jobs, beating the six-month average of 52,700. “If the labor market can …

By Scott Saunders Like-kind exchanges have been a vital part of the Internal Revenue Code under Section 1031 since 1921. A 1031 exchange allows an investor to defer the recognition of capital gains when exchanging one appreciated investment property (the “relinquished property”) for another “like-kind” investment property (the “replacement property”). Most commercial 1031 exchanges today are orchestrated transactions in which an investor uses a qualified intermediary (QI) to facilitate the sale of the relinquished property to one party and the purchase of the replacement property from another party. The capital gain inherent in the relinquished party is not taxed upon its transfer. However, since the basis of the relinquished property becomes the basis of the replacement property, the capital gains tax is not eliminated, it is merely deferred until the property is sold, or exchanged for non-like-kind property. Contrary to popular myth, Section 1031 is not a loophole or a tax savings vehicle. As mentioned above, the capital gains tax is not avoided — it is merely deferred. This outcome is based on sound tax policy. The essential logic is that the investor, in exchanging one appreciated property for another like-kind property, has not realized the gain inherent in the …