Features

ORLANDO — Same-day delivery from major e-commerce and multichannel retailers during the 2012 holiday season introduced e-commerce as a viable option, even for last-minute shoppers. This evolution in customer demand now ripples through the supply chain for all retailers, prompting executives to re-evaluate real estate strategies, according to a new report from Jones Lang LaSalle. “Retailers are anxious to create effective multichannel strategies that cater to new customer expectations, such as same-day delivery as well as e-commerce and m-commerce,” said Kris Bjorson, head of JLL’s retail and e-commerce distribution group. “This means revaluating their supply chain networks and distribution models down to one of the most important components, their distributions centers.” JLL’s report chronicles the transformation of the warehouse and distribution facilities referred to as big boxes — those exceeding 250,000 square feet — that form the backbone of the supply chain. Multichannel retailers demand changes to these facilities to better support order fulfillment, including more picking and packing tasks that mean more employees are needed at each site. “Multichannel retailers must first articulate their service commitment, then align all their real estate decisions,” says Rich Thompson, head of JLL’s supply chain and logistics solutions group. “Location of big-box facilities …

By Mike Mullin TOTOWA, N.J. — Cloud technology is creating a stir in the commercial real estate world. However, the meaning of this term and the value of its associated technology platform remains ambiguous. So what, exactly, is cloud computing, and how can it help multifamily, office, industrial and retail real estate owners and operators? Most people are familiar with the concept of Software-as-a-Service (SaaS), where software is purchased by subscription, and then delivered to users via the Internet. Cloud has that component — and more. In the simplest sense, cloud computing can be thought of as enabling a large pool of users to share the same resources. The cloud platform enables organizations to manage all of their technology over the Internet. This includes networking components as well as mail, productivity tools and enterprise software. Storage is a big part of it too. Companies can perform backups, and store documents and data via the cloud. Image created by Sam Johnston. Cost reduction: In the cloud environment, a provider administers the infrastructure, including automatic network and software updates. Users have immediate online access to application software and databases; they simply log in and everything is up to date and ready to …

CHICAGO— Although global hotel deal volume in 2013 is projected to remain in line with the most recent three-year average, Jones Lang LaSalle’s Hotels & Hospitality Group believes that signs point to an ongoing uptick in hotel transactions activity in the Americas sooner rather than later. Five forces will drive the hotel investment market during the next five years, pointed out Jones Lang LaSalle at the recent Americas Lodging Investment Summit (ALIS) at the J.W. Marriott Los Angeles LIVE. “There will be a significant amount of property coming to market in 2013 from a combination of the deleveraging occurring as $55 billion of CMBS loans mature in the next few years, and we’ll see investors who bought earlier in the cycle want their capital gains and they’ll sell,” said Arthur Adler, Americas CEO of Jones Lang LaSalle’s Hotels & Hospitality Group. “You can’t underestimate the composition of hotel ownership over a long period of time, as many hotels today are in the hands of traders versus holders,” emphasized Adler. Investors should watch the following five key forces and their impact on the hotel market: Boom or bust?: Global deal volume is projected to reach as high as $33 billion this …

Rachel Goff WASHINGTON, D.C. — The January nonfarm payroll report bolsters the argument that the U.S. economy is slowly improving, and the upward revisions to the 2012 data may encourage commercial real estate investors to take more risk, says Bob Bach, national director of market analytics for Newmark Grubb Knight Frank. Employers added 157,000 net new jobs in January, including 166,000 in the private sector. What’s more, the nation added 335,000 more workers to the employment rolls in 2012 than initially reported. “This report emboldens the risk takers moving into secondary markets and Class A-/B+ assets in primary markets, a trend that is already in place,” says Bach. “If investors believe the economy, specifically the labor market, is improving faster than previously thought, it means the outlook for net operating income at the property level also has improved.” The job gains were healthy across many sectors including retail (+32,600); construction (+28,000); education and health services sector (+25,000); leisure and hospitality (+23,000); and manufacturing (+4,000). For all of 2012, the manufacturing sector added 149,000 jobs, or a monthly average of 12,417 jobs. Two notable areas of contraction were in the transportation and warehousing sector (-14,000), and government (-9,000). REBusinessOnline.com asked Bach …

SAN DIEGO — The Washington, D.C.-based Mortgage Bankers Association (MBA) is predicting originations of commercial and multifamily mortgages to grow to $254 billion in 2013, an 11 percent spike from 2012. MBA previewed its second annual forecast at its Commercial Real Estate Finance (CREF)/Multifamily Housing Convention & Expo in San Diego. Approximately 2,600 real estate finance professionals have registered for the show, which runs through mid-day Wednesday. “2012 was a strong year for the commercial and multifamily mortgage markets, and 2013 is shaping up to continue the growth,” says Jamie Woodwell, MBA’s vice president of commercial real estate research. Multifamily originations will take the lion’s share of the 2013 activity, according to the forecast. Originations of multifamily mortgages are forecast to reach $100 billion in 2013. Additionally, mortgage debt outstanding for commercial and multifamily properties is anticipated to grow in 2013 by more than 2 percent. The forecast calls for 2013 to end the year above $2.4 trillion. The forecast extends beyond 2013. MBA is also predicting that originations will keep its upward trajectory and close 2015 at $289 billion. Jay Brinkmann, MBA’s chief economist and senior vice president of research and education, explains that the commercial real estate finance …

WASHINGTON, D.C.— The U.S. industrial market is poised for significant growth with annual net absorption forecast to reach 150 million square feet in 2013 and 175 million square feet in 2014, according to the NAIOP Industrial Space Demand Forecast. These levels of demand are 50 and 75 percent above the net absorption figure of roughly 100 million square feet notched in 2012. The reduced risk of a double-dip recession and stronger economic and job growth have given the industrial sector a boost, points out NAIOP (formerly known as the National Association of Industrial and Office Properties). “Industrial has heated up,” says Dr. Randy Anderson of the University of Central Florida, one of the authors of the forecast. “The industrial segment will experience strong and continuous growth through the fourth quarter of 2014 due to clarity post-election and post-fiscal cliff, easing in the credit markets, and improvement in both consumer and business confidence.”?? Many economists were jolted earlier this week, however, to learn that the U.S. economy contracted at an annualized rate of 0.1 percent in the fourth quarter of 2012, according to the federal government’s initial estimate. But as The Wall Street Journal reported, the surprise drop was driven by …

By Duke Realty Healthcare Team The healthcare industry and healthcare real estate have changed dramatically during the past several years. Healthcare reform, the Great Recession, lower reimbursements and other issues should continue to drive changes, including new uses of medical office space, creative new partnerships and an increase in monetization of outpatient facilities, according to Indianapolis-based Duke Realty Corp. (NYSE: DRE) Hospitals and health systems should see the following trends over the course of the next five years: 1. Higher-acuity care will increasingly move to medical office buildings (MOBs): The 2010 Patient Protection and Affordable Care Act requires hospitals to invest in, and implement, many costly new systems and procedures. Hospitals also face a continued downward pressure on both Medicare payments and private insurance, all of which is forcing them to look for possible ways to cut costs. MOBs offering higher-acuity care and/or non-acute care are an attractive solution because they cost less to build, operate and maintain than hospitals and inpatient facilities, for both physical and regulatory reasons. North Fulton Hospital’s new North Fulton Medical Plaza in Roswell, Ga., is a good example of an MOB that provides higher-acuity care. Also, outpatient facilities in suburban areas can be a …

By Bob White The headline numbers will show a plunge in sales of seniors housing properties in 2012 compared to 2011 when all is said and done. The drop is magnitudes greater than any other property type in a commercial real estate investment market that, overall, was up more than 10 percent in 2012. The expected 70 percent drop in seniors housing acquisitions from 2011, or about $18 billion fewer deals, looks very bad and is typically associated with severe and negative influences. For example, investment sales in Spain and Portugal were similarly down in 2012. However, the seniors housing sector is nothing like Spain or Portugal. In fact, the investment trends for seniors housing properties are quite healthy, and the prospects are bright. Prices are holding steady, if not slightly improving. The composition of investors is becoming more diverse with new buyers, particularly foreign ones. Mortgage capital is more plentiful and much cheaper. Demand is outstripping development. Make no mistake, the investment fundamentals in the seniors housing sector are favorable, even though the headline investment sales numbers indicate otherwise. Appearances can be deceiving For 2012, U.S. sales of seniors housing properties greater than $2.5 million was approximately $9 billion, …

Moderate price swings for several construction materials last year gave contractors some breathing room, but future price spikes could push many firms into the red, says Ken Simonson, chief economist for the Associated General Contractors of America, a trade association based in Arlington, Va. “Contractors still have not recovered from the cost increases they had to absorb in 2010 and 2011.” Association officials note that 90 percent of contractors surveyed for the group’s “2013 Construction Hiring and Business Outlook” predict that materials prices will increase in 2013. They add that an increasing number of contractors will try to pass on some of those price increases to customers this year, noting that 29 percent report they will try to raise bid prices this year, compared to only 15 percent that raised prices in 2012. “The days of low bids and relatively inexpensive construction costs are clearly numbered,” says Stephen Sandherr, CEO of the association. “While the construction industry is still facing some difficult headwinds, there is a clear sense that the industry is slowly turning a corner.” Prices for construction materials inched down in December, closing out a year of relatively subdued changes in both materials costs and bid prices, according …