WASHINGTON, D.C. — The Society of Industrial and Office Realtors (SIOR) held its annual Spring World Conference in Washington, D.C. at the Omni Shoreham hotel from April 10 through April 13. The event drew over 800 SIOR members from 12 different countries around the globe. Major topics of discussion at the conference included: the impact of e-commerce on the industrial market; emerging digital technologies and their practical applications for the brokerage community; a discussion of how brokers and investors can access opportunities with the U.S. Government General Services Administration and the Department of Veterans Affairs; and how emotional intelligence impacts success in our personal and professional relationships. Special guest speakers included: Joseph F. Coughlin, PhD, director of the Massachusetts Institute of Technology’s AgeLab and author of “The Longevity Economy,” who provided insight into how the lifestyles of an aging but energized, tech-enabled, older demographic will impact the built environment Robin Chase, co-founder and former CEO of Zipcar and author of “Peers Inc.” who discussed how a combination of people power and corporate power can unlock the potential of a new, collaborative economy Greg Lindsay, a senior fellow of the New Cities Foundation who gave a talk on the emergence of …
CARLSBAD, Calif. — Seniors housing investment and construction in the United States slowed in the first part of 2019, but investors are confident in the long-term outlook for this sector, according to a “Senior Housing Snapshot” report by Real Capital Markets (RCM). Following several years of robust sales and construction activity, the seniors housing market is redefining itself, adjusting to shifts in investor activity and a focus by many investors on a long-term horizon, the report concludes. RCM’s national report incorporates the sentiments of investors across the country and national statistics on investment activity from Real Capital Analytics (RCA), as well as construction and occupancy statistics from the National Investment Center for Seniors Housing & Care (NIC). Based in Carlsbad, RCM is a marketplace for selling commercial real estate properties. U.S. investment sales in seniors housing totaled $2.8 billion in the first two months of 2019, down from $3 billion in the same time period in 2018. This follows $15.2 billion in sales for all of 2018. According to U.S. investors, developers and real estate brokers surveyed and interviewed for the report, 66 percent believe that activity levels in 2019 will be comparable to the total sales for 2018. “Perspective …
ANNAPOLIS, MD. — The occupancy rate for seniors housing across the United States climbed slightly to 88.1 percent in the first quarter of 2019, according to the National Investment Center for Seniors Housing & Care (NIC), a nonprofit organization that provides research and analytics to the seniors housing industry. Occupancy increased 10 basis points from the previous quarter and decreased 20 basis points from one year ago. Occupancy for the first quarter of 2019 was 210 basis points below its most recent high of 90.2 percent in the fourth quarter of 2014. “Occupancy in seniors housing properties remained stable nationally but varied greatly from market to market,” says Chuck Harry, NIC’s head of research and analytics. “Local markets can vary due to changes in local economic performance, barriers to entry such as zoning and regulations, shifting demographics, and other factors.” Of the 31 metropolitan areas that comprise NIC’s primary markets, the highest first-quarter U.S. occupancy rates occurred in San Jose (94.1 percent) and San Diego (92.2 percent). The lowest first-quarter occupancy rates were in Houston, TX (77.1 percent) and San Antonio (77.4 percent). NIC data show the largest occupancy increase from a year ago occurred in Las Vegas (from 86 …
Managing fixed expenses is the best way to ensure the long-term profitability of investment properties, especially in a flat market. The largest continuing expense for most commercial properties is the property tax bill, and in a market with skyline-defining properties and headline-grabbing sales prices, tax assessors have multi-tenant office properties in the crosshairs. Any reduction in tax burden can drastically improve an investment’s profitability, competitiveness and tenant retention. As another assessment season begins across the Midwest, understanding tax assessors’ common errors can equip property managers and owners with the tools necessary to review the accuracy and reasonableness of the assessments on their office properties and, when appropriate, challenge those assessments. Know the relevant market To an outsider, the office market can appear monolithic. To such people, rent, occupancy and other income characteristics of office properties are consistent throughout the market. But pulling data from the wrong market can lead assessors to an incorrect result. For example, assessors may assume that Class A downtown office towers are the best-performing assets in the market, and value them accordingly. Contrary to this perception, though, Class A properties may not outperform all Class B or Class C properties, and downtown may not be the …
AUSTIN, TEXAS — The concept of living-learning communities, wherein students take advantage of a property’s location and amenities to share academic and personal experiences, is growing in popularity in the student housing industry. As the property sector matures and more student housing communities become outdated, developers are finding success with new projects that capture both the living and learning sides of the college experience. This trend is visible at both on- and off-campus properties. The subject of living-learning communities was raised during the opening Power Panel at the 2019 Interface Student Housing Conference. The three-day event, which took place from April 8-10 at the JW Marriott Hotel in Austin, Texas, drew approximately 1,400 attendees. Bill Bayless, CEO of American Campus Communities (ACC), an Austin-based REIT, kicked off the discussion of living-learning communities by noting that, in general, America’s inventory of student housing product is aging, and not like a fine wine. “The average age of on-campus housing at universities across the United States is 53 years old,” said Bayless. “What continues to be one of the greatest opportunities in the space is the replacement of outdated on-campus student housing with living-learning communities on campus that are fully immersive.” Bayless was joined …
Although the retail sector remains under pressure — evident by the spate of store closures and announcements since the start of the year — the job losses across the industry have not been severe, says Ken McCarthy, principal economist and senior managing director at Cushman & Wakefield. In fact, some retailers are in an aggressive hiring mode. Total employment in the U.S. retail industry has increased by 1.4 million jobs since 2010, according to McCarthy, who was quick to add that the sector has shed approximately 140,000 jobs over the past two years. The Bureau of Labor Statistics (BLS) reports a net loss of 11,700 retail jobs in March, which came on the heels of a revised loss of 18,500 jobs in February. (The retail numbers from the BLS exclude restaurants.) “Store types that have seen substantial job losses include those that are most vulnerable to competition from the e-commerce industry, including electronics and appliances, sporting goods, apparel and accessories, and more recently general merchandise stores,” explains McCarthy. “While we would not characterize the job losses as that severe, those store types and product types that are most vulnerable to e-commerce are likely to remain under pressure.” According to Challenger, …
After a subpar jobs report in February, one might say that the U.S. employment market came into March like a lamb but went out like a lion. Employers added 196,000 jobs in March, according to the Bureau of Labor Statistics (BLS), with notable gains in healthcare and in professional and technical services. The headline number was a big improvement over the 33,000 jobs added in February and brought the longest streak of employment growth on record to 102 months. More specifically, the healthcare sector added 49,000 jobs in March and 398,000 over the past 12 months. Employment in professional and technical services grew by 34,000 in March and 311,000 over the past year. The leisure and hospitality sector also fared well in March by adding 33,000 jobs. Meanwhile, the national unemployment rate was unchanged at 3.8 percent. REBusinessOnline.com caught up with K.C. Conway, chief economist at the CCIM Institute, for his take on the health of the economy, its impact on commercial real estate and what he thinks might be the Federal Reserve’s next move on interest rates. What follows is an edited version of Conway’s remarks: REBusinessOnline: Do you subscribe to the takeaway expressed by some pundits that the …
Through economic ebbs and flows, the self-storage sector continues to prove its strength. Although real estate industry players are wary about labeling any sector as recession-proof, the self-storage sector tends to be a stable asset class during economic booms and downturns, according to Paul Letourneau, manager of commercial real estate lending with Chicago-based Alliant Credit Union. And over the last decade, self-storage facilities have become more flexible spaces, which is driving greater demand for the product. Across the country, these facilities are being used in novel ways, such as short-term product warehousing for small businesses; incubator space; personal workspaces; and wine storage in climate-controlled units. These new uses, coupled with traditional storage needs, create increasing demand and stability in the self-storage sector. According to Letourneau, self-storage facilities have adjusted to urban environments and their residents’ needs with multi-story climate-controlled properties that feature customer lounges and high-tech monitoring and security systems. Meanwhile, suburban markets show greater demand for traditional single-story self-storage facilities with space for RV and vehicle storage. However many suburban facilities are adding climate-controlled units and more security to meet customers’ needs. “The bottom line is that customers — from baby boomers and millennials to small business owners — …
NEW YORK CITY — The national retail vacancy rate stood at 10.2 percent at the end of the first quarter of 2019, unchanged from the previous period and up 20 basis from the first quarter of 2018, according to New York-based commercial real estate analytics firm Reis. The report was based on analysis of the company’s internal information on retail properties in 77 American metros. The average asking rent for U.S. retail space closed the quarter at $21.30 per square foot, up 1.6 percent from a year ago, per the report. Net absorption for the opening quarter was 949,000 square feet, which represents a small decline from that period in 2018. However, the report notes that a slower pace of new construction has helped offset occupancy dips brought on by brick-and-mortar store closures. Less than a million square feet of new product was delivered during the first quarter of 2019. In the first quarter of 2018, the volume of new deliveries was more than double that figure, and in the fourth quarter of 2018, supply additions nearly tripled that number. Reis projects that new construction will ramp up as the year unfolds, with the total U.S. retail inventory projected to …
ATLANTA — The hotel industry is still setting records. According to Jan Freitag, senior vice president of Tennessee-based STR, United States hotels in 2018 had the highest availability, most sales and the highest average daily rate (ADR) ever recorded. The total inventory of rooms available was up 2.1 percent in February year-over-year, the first time in history that the annual pace of supply growth has exceeded 2 percent, Freitag said. Freitag presented the research during the 31st annual Hunter Hotel Investment Conference, which was held from March 20 to 22 at the Atlanta Marriott Marquis in the city’s downtown area. The conference drew approximately 1,850 attendees. STR found that in 107 out of the past 108 months, the industry has posted an increase in revenue per available room (RevPAR). The lone exception was September 2018, a month Freitag called an anomaly. Although hotel revenue continues to grow, there is a large chunk of travelers around the world that the U.S. is missing out on due partially to the exchange rates that don’t favor travelers from developing countries, says Freitag. More people are traveling than ever before, backed by greater leisure spending among the emerging middle classes of India and China. …