Features

By Benjamin Blair, Esq. Shopping center owners often find that factors beyond their control detract from the marketability and profitability of their investments, particularly in the current depressed market. Economic change and evolving technology, for example, have altered the way retailers and property owners transact business. While lenders keep a tight grip on potential financing, brick-and-mortar retailers must compete against an increasingly global, virtual marketplace. Despite — and indeed because of — this bleak picture, property owners have reason for optimism. Several states and localities, including Chicago and Indiana, are in the midst of systematic property reassessments. Because this cycle of reassessments falls during a time when retailers are still struggling under the effects of the recession, property owners have an opportunity to reap tax savings from this market turbulence and increase the property’s bottom line. The goal of a property tax assessment is to apply the tax rate to an accurate property value. This value is generally set at either market value or at the property’s value-in-use. A property’s value, however it is set, can be affected by any number of factors, the most important of which for retail properties is the property’s ability to earn rental income. Real-life …

By Brad Weiner CHICAGO — Over the past few years, market analysts, brokers and investors have been anxious to see the industrial real estate market rally in the wake of an unsteady economy. Unstable conditions have led to a significant slowdown in the buying and selling of buildings and delayed tenant expansions and renewals. The volume of construction projects, including build-to-suit properties and speculative developments, also slipped dramatically in recent years. Fortunately, it seems that this period is coming to a close. For the first time in five years, the Chicago industrial market has seen four consecutive quarters of positive absorption. The third quarter saw 2.6 million square feet of positive absorption, with 4.9 million leased in the Chicago industrial market. Despite this positive trend, the market has still been bumpy, considering the second quarter showed 7 million square feet of positive absorption with 4 million square feet leased. Overall, the numbers suggest the market is moving in the right direction. Bright spots Specifically, Chicago's O'Hare market and the I-55 corridor were incredibly active in the third quarter. Our findings indicate that a generous portion of this activity was made up of existing tenant expansions and renewals. Noteworthy deals included …

REBusinessOnline.com is conducting a brief online survey of brokers, lenders and the owner/developer/manager community to gauge market expectations for 2013, and we need your help. This survey should only take a few minutes to complete. The results will appear as a news feature story in the January issues of our print magazines and we will excerpt findings for an article in this space in as well. Questions cover a variety of topics, ranging from the outlook for investment sales and leasing activity in 2013 to development and lending opportunities to interest rates. Note: We prefer to attribute comments we quote from open-ended responses, however you may respond anonymously if you prefer. Heartland Real Estate Business Surveys For professionals located in Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio and Wisconsin. Midwest Brokers, click here. Midwest Lenders, click here. Developers/Owners/Managers, click here. Northeast Real Estate Business Surveys For professionals located in Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont. Northeast Brokers, click here. Northeast Lenders, click here. Northeast Developers/Owners/Managers, click here. Southeast Real Estate Business Surveys For professionals located in Arkansas; Alabama; Florida; Georgia; Kentucky; Louisiana; Maryland; Mississippi; North Carolina; South Carolina; Tennessee; …

NORTH PLAINFIELD, N.J. — Holiday shopping won't be as robust as it was last year, but that doesn't mean retailers shouldn't expect sales gains. The 2012 holiday forecast from Deloitte calls for a retail sales increase of 3.5 to 4 percent over last season. Total holiday sales are expected to reach up to $925 billion. However, the anticipated increase won't be as strong as that of 2011, when holiday sales rose 5.9 percent over the prior holiday season. The firm blamed the tepid outlook on high gas prices and weak housing and job markets. The report added that while consumers may have paused in advance of the election, retailers may benefit from a post-election “spending boost.” Additional analysts and trade groups also posted a tempered forecast for the holiday shopping season this year. The National Retail Federation (NRF) predicts that holiday sales will increase 4.1 percent, which would be a drop from the 5.6 percent growth in 2011. It is, however, the highest forecast NRF has issued since the recession and beats the 10-year average holiday sales growth of 3.5 percent. The federation's forecast is also more optimistic than the International Council of Shopping Centers (ICSC), which predicts a 3 …

ATLANTA — Ignore the fiscal cliff and think about it more as a “fiscal bungee jump,” advises Rajeev Dhawan, director of Georgia State University’s Economic Forecasting Center. This year will end with two lackluster quarters followed by a weak economy next year thanks to a lack of business investment, which will eventually rebound in 2014, predicts Dhawan. “This quarter and next quarter are ruined,” remarked Dhawan at the Economic Forecasting Conference last Wednesday, Nov. 14, at GSU’s student center. “Then things will pick up by year-end 2013.” Dhawan blames the impending fiscal cliff for creating uncertainty among U.S. households, and influences from Europe and China as the main reasons for next year’s desolate outlook. (The fiscal cliff is the end of certain tax breaks for businesses and payroll tax cuts, and the beginning of taxes related to President Obama’s health care law.) While consumer sentiment appears upbeat heading into the holiday season, corporate sector investment is at a virtual standstill, said Dhawan. “Consumer expectations will be dashed in the coming months, the corporate mood is also bleak as revenue growth has stalled affecting job growth, and the fallout from a recessionary Europe and a stalled China will also be felt …

Following in the footsteps of New Orleans and Portland, Oregon, Atlanta will be implementing its own streetcar project to alleviate some of the city’s traffic congestion and further revitalize its downtown streetscape. The City of Atlanta, Atlanta Downtown Improvement District and MARTA have partnered on the Atlanta streetcar project, which is a transit network that will link communities and improve mobility. The $69.2 million project, which will provide 2.6 miles of transit with 12 stops upon completion in late 2013, is designed to connect Centennial Olympic Park to the Martin Luther King Jr. National Historic Site. “Everywhere streetcars have been built, property values have increased,” said the mayor of Atlanta, Kasim Reed, at the Carter Breakfast, which occurred Thursday, Nov. 8, before a crowd of approximately 200 attendees. Driven by their desire for convenience and diverse neighborhood amenities, the millennial generation is an obvious target for downtown Atlanta's Streetcar corridor project. According to a report from New Media Trend Watch, millennials (persons born from 1982 to 2002) comprise approximately 25 percent of the U.S. population and are evenly split between males and females. Atlanta’s 10th annual Downtown Development Day, which took place Wednesday morning, Nov. 7, in the AmericasMart Building …

Heather Merz From smart phones and tablets used in the field to social media enhancing marketing outreach, the construction industry is getting younger and more agile. The U.S. Census says by 2018, the Millennial Generation, a distinctive group of Americans born after about 1980, will compose the majority of the construction workforce. The construction industry in Texas is taking huge strides to adapt to new methods of recruitment, management and retention of millennials. Employers who better understand what motivates and engages this generation will be better positioned to secure the top talent, keep them happy and productive and make sure competitors do not snatch them up. Construction has a lot to offer this generation in terms of longevity. Working in an environment that is always upgrading, expanding and growing gives millennials access to long-term growth and a sustainable economic future. MORE BRAINS, LESS BRAWN The construction industry as a whole has evolved and the Millennial Generation is truly changing the way construction firms in Texas recruit. Each year, 467 students on average graduate from a construction management school in Texas. With 34 construction management schools located throughout the state, employers have a competitive talent pool for hiring. Most Texas universities …

Matt Valley After the CMBS delinquency rate dropped below 10 percent in September, New York-based Trepp LLC projected that the delinquency rate would continue to see considerable downward pressure in the months to come. That was certainly the case in October, as the rate saw its biggest drop in 14 months. The delinquency rate for U.S. commercial real estate loans in CMBS fell 30 basis points to 9.69 percent in October. Loan resolutions remained high in October. More than $1.5 billion in loans were resolved in October with losses. The removal of these loans from the delinquent loan category accounted for 28 basis points of downward pressure on the delinquency rate. Newly delinquent loans — around $2.6 billion in total — put upward pressure of about 46 basis points on the rate. This was significantly less than September’s $3.3 billion of newly delinquent loans that contributed 59 basis points of upward pressure. Loans that cured in October put downward pressure of 45 basis points on the rate, essentially offsetting the amount of loans that became delinquent. Added together, the impact of the loan resolutions, the effect of loans curing, and the effect of newly delinquent loans created a net improvement …

By Bill Brown, Halpern Enterprises Coming out of the recent ICSC Southeast Conference in Atlanta, it’s clear that more buyers and sellers are talking about doing retail center deals. But here are two important questions: How real is the talk? And how motivated are buyers and sellers to get acquisitions done? To answer the first question, we are definitely seeing a higher volume of deals. Opportunistic sellers are seeing that this may be a good time to sell with cap rates at extremely low levels. At the same time, more special servicers are bringing properties to market after working through various issues, while REITs are selling non-core assets as they tighten their strategic focus either geographically or to certain types of properties. As for the buying side, though cap rates are low, numerous buyers are making deals work because of the low interest rates on longer-term debt. A number of buyers we talk to are planning to acquire a center, hold it for five to 10 years with cheap debt, and see what the future holds. But is this uptick in activity a sign of a marked strengthening of the marketplace, particularly as we near the end of the year? …