Archive for National News

Jul
31

US Industrial Vacancy at Record Lows

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percentage downThe growth of e-commerce and a steadily improving economy are driving demand for industrial space and helping push industrial vacancy to record-low levels, particularly near major population centers, according to the 2017 U.S. Industrial Midyear Outlook report from Marcus & Millichap.

“Vacancy rates on a national level have fallen to record lows while rent growth has accelerated to outpace all other commercial real estate property types, lifting performance metrics beyond expectations. While some port and intermodal hub markets will receive significant new supply that could dampen local performance, the e-commerce driven demand for urban last-mile warehouse space has sparked the need for more infill industrial space, particularly in major metropolitan areas,” Senior Vice President Alan Pontius, National Director, Specialty Divisions & John Chang, first vice president|Research Services, wrote in the report.

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Jun
28

Disney Sues over Property Assessments

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Lawsuit moneyWalt Disney Parks and Resorts are suing over their property tax assessments from 2016, calling them “excessive.”

Disney filed nearly a dozen lawsuits at the end of last month in Orange Circuit Court, arguing the assessments by Orange County Appraiser Rick Singh exceeded their properties’ fair market value and incorrectly “included the value of certain intangible property in the assessments.”

“The increases in the assessments of our property are unreasonable and unjustified,” a Disney spokesperson said in a statement. “Similar to other property owners in Orange County, we have no choice but to take action to dispute these errors by the property appraiser. We look forward to presenting our case in court.”

It’s not the first time the theme parks have sought to reduce their land values. In October, SeaWorld, Universal Orlando and Disney sued Singh, arguing their properties’ taxes were too high.

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Jun
05

Are Zillow Zestimates Actually Appraisals With a “Z”?

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NoZillowWhen Barbara Andersen listed her home for sale in Glenview, Illinois, this was not the first time that the real estate litigation attorney had listed her home for sale, with an asking price listed well above its Zestimate value. Anderson alleges that Zillow’s estimates have severely impacted her ability to sell and that the property is being unfairly calculated based upon inferior surrounding real estate that was built within a close proximity to a graveyard, and also located nearby a “less desirable” golf course.

The key allegations of the complaint are the poor quality of the real estate website’s estimates, and the problematic influence over prospective buyers viewing these estimates. According to paragraph 13 of the complaint “a tremendous roadblock to same has been the fact the Zillow posts a ‘Zestimate’ of person’s homes without their permission, consent and/or any license to do so.” Further, she alleges that Zillow’s Zestimate is “a sloppy computer-driven appraisal of the home.”

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May
02

Americans’ Confidence in Economy Stable, Positive

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thumbs-up1Americans have remained upbeat about the economy for 24 straight weeks, though their current level of confidence is lower than it was earlier in the year. Gallup’s U.S. Economic Confidence Index stood at +7 last week, generally in line with readings since the November presidential election. However, it is below the +16 score observed in early March and similar high scores in late January.

Gallup’s U.S. Economic Confidence Index is the average of two components: how Americans rate current economic conditions and whether they feel the economy is improving or getting worse. The index has a theoretical maximum of +100 if all Americans were to say the economy is doing well and improving, and a theoretical minimum of -100 if all were to say the economy is doing poorly and getting worse.

Shortly after the presidential election, Gallup’s U.S. Economic Confidence Index crossed into positive territory for the first time in nearly two years. The index’s overall improvement was mainly attributable to a surge in confidence among Republicans, who expressed widespread dissatisfaction with the state of the economy during former President Barack Obama’s tenure but whose opinions quickly changed course after a Republican won the White House.

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May
02

Will the Self-Storage Sector Rebound from 2016 Setback?

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self-storage3A planned 100,000-sq.-ft. facility in West Palm Beach, Fla. appears to break new ground in how self-storage properties are developed. Aside from 830 climate-controlled self-storage units, the mixed-use project will also include 1,200 sq. ft. of rentable retail space on the ground floor.

This is part of a larger effort on the part of municipalities to restrict the development of self-storage properties in favor of preserving space for manufacturing.

New York City became the latest city, along with Charleston, S.C. and San Francisco, to enact policies reining in the development of hotel and self-storage properties to preserve land for manufacturing uses and support job growth. The developers of the planned self-storage space in West Palm Beach included retail as a tactic to make the property more appealing to local authorities and gain zoning approval, say industry observers.

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Apr
26

Large Retailers 2016 Sales Per Square Foot (E-Marketer)

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sales per sf

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Apr
18

Why Aren’t More Small Apartment Projects Built?

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Large, luxury apartment and condo developments have been dominating headlines and casting a big shadow over the “little guys” in rental housing. A new report released by Enterprise Community Partners and the University of Southern California’s Bedrosian Center on Governance aims to call attention to this overlooked segment of the market.

The Understanding the Small and Medium Multifamily (SMMF) Housing Stock report emphasizes the formidable size of this segment of the market and its importance as a source of naturally occurring affordable rental housing. SMMF properties with two to 49 units account for more than half (54 percent) of all rental housing in the United States, according to the report. Many of these properties were originally built in the 1960s, 1970s, and 1980s. That aging inventory, along with limited amenities in many cases, contributes to lower average rental rates compared with those obtained by its larger, newer competitors.

small apartments

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Oct
26

Retail Single-Tenant Net Lease Cap Rates at Record-Lows

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boulder group logoSingle-tenant net-lease cap rates for retail properties reached a record-low 6.10 percent in the third quarter, reported Boulder Group, Northbrook, Ill.

STNL cap rates for the office and industrial sectors also decreased to 7.08 percent and 7.14 percent, respectively, said Boulder Group Vice President John Feeney.

“The overall net-lease market remains active with 1031 and private investors due to the passive nature of the leases and attractiveness of relative investment returns when compared to other asset classes,” Feeney said.

Feeney noted that uncertainty in some other investments compared to the stable yields generated by the single-tenant sector created “abundant” investor demand for STNL properties.

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Oct
17

Calkain Releases Cap Rate Report

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Click on the image to download the report.

calkain-10-2016

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Oct
11

NNNet Advisors Releases 3Q Net Leased Report

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nnnet-advisors-2016The modest increase in cap rates from Q1’s all time lows have held steady over the past two quarters. Buyers continue to take advantage of historically low interest rates while sellers cash in during this continued low cap rate environment with the hopes of rebalancing their portfolios.

We expect to see more of the same as we move into the final quarter of the year. While an increase in interest rates is eminent, the economy is still showing signs that it is not able to withstand anything drastic in the short run. Low interest rates continue to motivate investors to remain bullish on net lease opportunities, as there is still a spread to be achieved between current interest rates and cap rates, especially when utilizing shorter term debt.

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Sep
27

ICSC Replaces Giuliani Due to Support of Trump

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giuliani2Former Mayor Rudolph Giuliani has been axed as the keynote speaker at this year’s International Council of Shopping Centers’ New York National Deal Making Conference, Commercial Observer has learned. In his place will be Kevin Plank, the founder, chief executive officer and chairman of sports apparel giant Under Armour, according to a source with intimate knowledge of the situation.

The city’s 107th mayor has been dethroned as the keynote speaker following letters from real estate professionals calling for his removal because of his staunch support of a presidential candidate (Donald Trump) they deem divisive, according to a broker who requested anonymity.

“We shouldn’t bring politics into it,” the broker said. “We should have someone more open-minded and who is for globalization and not for stopping trade, etc.” He further said that having Plank, a former University of Maryland football player, as the speaker was more appropriate.

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Sep
26

Which Retailers Plan to Build the Most Stores?

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question-mark1a (1)Not all retailers are trimming back their brick-and-mortar footprints.

Dollar stores and off-price chains, taking advantage of solid sales and bargain-hunting shoppers, are on an expansion kick, claiming half the spots on a list of 10 retailers adding the most new store square footage, according to commercial real estate and analytics firm CoStar.

Dollar General, second overall, led a trio of dollar stores in CoStar’s top 10, based on retailers’ announced U.S. store openings as of the second quarter of 2016.

Dollar General, which started the year with nearly 12,500 stores, has announced plans to open 900 more this year and another 1,000 in 2017. Last week, the chain said it’s looking to hire 10,000 new employees by mid-October.

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Sep
26

Yardi: Deceleration in Apartment Rents Coming This Fall

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yardi-rentsDecelerating rent growth and a jump in new rental units are coming this fall, says Yardi Matrix in its newest edition of U.S. Multifamily Outlook.

Despite two quarters of weak GDP, strong nationwide employment growth and low inflation rates have offset earlier economic concerns, the report notes. Yardi predicts gains in consumer spending and wage growth in the wake of the employment spike. “Worries that the recovery is on its last legs appear to have subsided,” the report says.

As of August, rents were up by 5.0% year over year across the country, a deceleration from the 6%-plus increases seen in 2015 but still a strong rate of growth. Yardi attributes this moderation to current wage increases and affordability issues and predicts greater rent deceleration in tech-centric metros, where large rent rate increases have been met with an increase in supply. Nationwide, 360,000 units are set to be delivered in 2016, a staggering 45% jump from 2015’s 249,000 new units.

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Sep
21

Average Apartment Unit Size Down 7% Since 2009

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cramped-roomApartment units in the top 20 U.S. metro areas are shrinking. Those built from 2010 to the present are, on average, 7% smaller (70 square feet) than those built from 2000 to 2009, according to real estate research company RCLCO.

Most of that change is attributed to the higher share of studio and one-bedroom apartments relative to larger, mutli-room units. Floorplans are shrinking as well, particularly among studio and one-bedroom units, with just how much dependent on the area of the country. Three-bedroom units, however, are increasing in all but the very high-cost markets.

To some degree, millennials are forcing the mix change to studios and one-bedrooms, according to Bloomberg, as they delay starting families, which reduces their need for space.

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Sep
13

Top States for Doing Business – SC at #2

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2nd-place-trophyWhat’s it take to be recognized as a top state for doing business? On one hand, it’s a complicated question to answer, because there are a lot of factors that go into that kind of a reputation. On the other hand, you can get a pretty good idea of what it takes by checking out the attributes of some of the states that top the list.

The overall cost of doing business is, of course, a primary consideration, one that encompasses a wide range of components, from real estate costs to utility rates to labor expenses. The environment created by state and local leaders plays a big role, too — the choices they make on tax structures and business incentives can tip the scales on cost, and they also can impact the no-hassle factor driven by their overall responsiveness, their regulatory practices, and how fast they respond to permitting requests. And the kinds of workforce programs states establish make a tremendous difference in both labor-related costs and hiring challenges. A location or facility project won’t get far without adequate capital, either, and that’s a factor that can vary quite a bit from one place to another.

Site consultants have an insider’s view into all of these factors — and an unbiased perspective, too. That’s why Area Development’s Top States for Doing Business analysis solicits the views of in-the-know consultants. For 2016, we surveyed consultants and asked them to name their top state picks in each of 10 categories that impact location and facility decisions. They shared their top picks in each category, and we weighted those scores to come up with rankings within each factor, along with overall rankings that take all of the factors into account.

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