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Jerry Nelson and Dolores Kelley Many shopping center owners, developers and others have cut costs, increased income and received other rewards from refinancing. Some borrowers are rushing to refinance now before interest rates jump up more than they already have. If you are nearing the end of your term loan, have an adjustable rate or have established equity in your property and desire to lower your monthly payments or cash out some of your equity, you should evaluate whether refinancing would benefit your bottom line. Should You Refinance Now? In March, we warned on our New Jersey law blog that interest rates could climb and asked readers to consider refinancing to cut costs and increase income before losing the opportunity to lock in a lower rate. In May, we advised on our New Jersey Law Blog that landlords were buying, financing, improving and selling properties to take advantage of low interest rates, available financing and rising values. As predicted, rates have started to tick upward, resulting in increased borrowing costs, which will continue to climb along with rates. The 10-year Treasury yield jumped to 2.93 percent on Sept. 12, up from 1.71 percent at the same last year. The good …

ATLANTA — Poor income growth, a cautious consumer and ongoing political uncertainty continue to hinder corporate investment, which is fostering a challenging economic recovery. While moderate job gains and strong auto sales are capturing headlines and bolstering optimism, the public should not misinterpret these trends, says Dr. Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University (GSU). Auto sales, for example, are substantially above an annual rate of 15 million, the point at which Dhawan had previously predicted a strong economic recovery would take hold. “Car manufacturers needed to clear out an inventory buildup, and consumers responded to the resultant price drops by buying,” said the economist during his presentation at GSU's student center on Aug. 28. “Thus, the growth in auto sales is not fully indicative of a proper recovery that is gaining steam, but of special circumstances.” The other key components of the recovery — home prices and housing starts — also carry mixed signals. New construction typically cascades from banks to builders to suppliers, and ultimately to buyers who purchase new items for their new homes, explained Dhawan. The last leg is missing, according to the chief economist, who described consumers as utility shoppers. …

The Atlanta hotel’s strong performance in the last three months of 2012 may be tough to beat, says a local lodging expert. “The fourth quarter was terrific. Is that a good thing or bad thing?” asked Mark Woodworth, president of PKF Hospitality Research LLC. Woodworth opined that it may not be the best thing going forward because it makes the year-over-year measures more difficult. Woodworth’s presentation on the Atlanta market capped off the Atlanta Lodging Outlook 2014 conference, held on Monday Aug. 26 at the InterContinental Hotel Buckhead in Atlanta. The Atlanta hotel market recorded a great fourth quarter last year in terms of its revenue per available room (RevPAR). The biggest spike in RevPAR was in the downtown hotel market, which saw a 26 percent increase from the previous year. Every submarket increased in RevPAR in the fourth quarter compared to the fourth quarter of 2011. Other submarkets that posted large spikes in RevPAR include Midtown, Central Perimeter, Peachtree Corners, I-85 South, Buckhead and Town Center North. PKF forecasts that RevPAR in 2013 for the entire Atlanta hotel market will be $54.79, a 4.7 percent increase compared to 2012 ($52.31). Slide courtesy of PKF Hospitality Research Woodworth also relayed …

Michael Bull, CCIM The decision for companies to lease or purchase their real estate is critically important right now with favorable prices and low interest rates. There are many key criteria — including the expected growth of the company, location and the firm’s return when investing in their own business — that must be taken into consideration. At this point in the cycle, there are some extraordinary factors to weigh. That is why we assembled a panel of experts on a recent episode of the “Commercial Real Estate Show” to explore the lease vs. purchase decision. That’s right, like LeBron James, we created a show around the decision. Making an Informed Decision “For most companies, their real estate is the means to an end — it’s there to serve the business,” said Eric Entringer, senior manager at Ernst & Young's San Francisco office, during the show. “Businesses really need to understand where they are in their life cycle as a company and use real estate to support their overall objectives.” For many businesses looking for space, owning their own real estate does offer certain perks, such as controlling occupancy costs. There is no concern about escalating rents. In fact, if …

Construction employment continued its spotty improvement in July as the vast majority of states posted year-over-year gains. Still, most states posted decreases in July compared with June, according to the Associated General Contractors of America. The analysis is based on data from the U.S. Labor Department. The association says the steady improvement in employment in many states was welcome news, but cautioned that the industry’s recovery was still fragile. “Today’s report shows the fragile and fragmentary nature of the industry’s recovery,” says Ken Simonson, chief economist for the Arlington, Va.-based association. “Construction employment increased in 37 states during the past 12 months — the largest number with gains since early last year — but only two states have surpassed their pre-recession peaks, and barely a third of states added construction jobs between June and July.” Both the widespread annual gains and monthly losses were consistent with national totals for July. Data released earlier this month showed construction employment rose 3 percent from July 2012 to July 2013, but slipped by 0.1 percent, seasonally adjusted, in the latest month. The largest year-over-year percentage increase in construction jobs occurred in Wyoming (16.7 percent; 3,500 jobs), followed by Mississippi (12.3 percent; 5,800 jobs) …

By Joseph Lowry The supply/demand imbalance for institutional-quality retail real estate in the Northeast continues to exist, with hundreds of millions of dollars of capital chasing an extremely limited number of acquisition opportunities. For landlord-focused retail real estate services specialists, this is fueling a notable increase in advisory activity for both the broker-listed shopping centers, as well as for off-market shopping center acquisition opportunities. While their acquisition criteria and sweet spots vary somewhat, most institutional investors and fund managers today are still looking for Class A, dominant grocery-anchored shopping centers located in gateway markets. At the height of the commercial real estate market in 2007, these centers were trading at very low cap rates, and we are seeing those pricing levels once again in 2013 for true institutional-quality retail centers. The recent sale of a 100,000-square-foot Whole Foods-anchored center in Pennsylvania is a great example. When this asset came on the market, demand was fierce and dozens of offers were received. The center ultimately traded far above the initial pricing expectations at a low 5 percent cap rate. When investors make the decision to “reach for a property” with very tight spreads, they need to be absolutely certain about the …

By Bob Kenyon It is an anniversary that many would like to forget: Ten years ago on Aug. 14, the massive Northeast Blackout left around 50 million people in the U.S. and Canada in the dark. As we think back to 2003, it is worth remembering that blackouts continue to pose significant operational challenges for real estate professionals here in the Midwest. Because, while the Northeast Blackout was particularly memorable for its size and scope, smaller local and regional outages remain a frequent source of damaging and costly business interruptions across the Midwest. While few of those outages make headlines, the numbers are startling. In 2012, there were 268 reported power outages in Michigan, Illinois and Wisconsin alone. And those outages come with a sizable price tag: power outages and interruptions cost the U.S. economy anywhere from $80 billion to $188 billion each year. The picture does not look much better when you break it down to the individual firm level. The Department of Energy reports that IT systems power interruptions result in around a third of companies losing between $20,000 and $500,000; a fifth losing between $500,000 and $2 million; and 15 percent facing losses that exceed $2 million. …

By Steven McCraney As we enter the second half of the year, there is good reason to be optimistic that the economic recovery is gaining momentum. Rents are stabilizing, property values are strengthening and investment and construction are on the rise. These and other positive signs have boosted Central Florida's industrial real estate market. Several factors are at work. First, the Orlando area is attractive to foreign capital. In February, Siemens Energy Inc. announced it would invest $7 million in a 40,000-square-foot wind turbine training center near Orlando International Airport. The region is also a popular destination for international home hunters, according to online real estate marketing tools provider Point2. Second, there is an abundance of capital in the market searching for yield, despite the volatility of the commercial mortgage-backed securities market evidenced by the widening spreads during the past two months. We consistently read that billions of dollars are available from life insurance companies, private equity, REITs, pension funds and other traditional sources to fund properties in primary and secondary markets across all property types. It’s true that the market still holds few opportunities because there has been little construction and sales of opportunistic properties have been infrequent in …