Archive for National News

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.

CLICK HERE TO DOWNLOAD REPORT

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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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Sep
12

What if They Had Relied on Zillow to Set the Asking Price?

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money-drainAccording to The State newspaper, a house on Lake Murray just sold for $1,425,000.

The “Zestimate” for the same house, at 18 Scott Branch Road in Chapin, SC is $822,368.

Think twice before placing any weight on anything from Zillow.com……..

 

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Aug
26

‘Dual Agency’ Transactions Under Scrutiny in California Court Case

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dual-agencyA case scheduled to come before the California Supreme Court Sept. 7 is set to re-examine the fiduciary responsibilities borne by real estate brokers who engage in “dual agency” representation — the situation in which buyers, sellers, landlords and tenants are represented by brokers within the same real estate agency or brokerage, a commonplace practice in both residential and commercial property transactions.

The California Supreme Court in 2014 agreed to review the case, Horiike v. Coldwell Banker Residential Brokerage Co., in which homebuyer Hiroshi Horiike worked with a Coldwell Banker agent to purchase a Malibu residential property listed by a Coldwell Banker agent in another office.

After the sale closed, Horiike discovered that the size of the house was 11,000 square feet rather than the 15,000 square feet claimed in marketing materials. Horiike sued the listing agent and Coldwell Banker, claiming that both had breached their fiduciary responsibility by failing to advise him to hire a third party to verify the actual square footage.

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Aug
22

Demand for Student Housing Assets About to Increase

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college housingInvestors have already acquired a tremendous volume of student housing properties this year, but the busy buying season for student housing is just getting started.

“It’s frothy and it’s active,” says Dorothy Jackman, managing director of student housing services for real estate services firm Colliers International.

The bidding for student housing properties seems likely to get more intense. Investors usually trade the most student housing properties in the fall, after the results of the fall leasing season are in. This year, early results look very good: occupancy rates are on track to meet or even exceed the high levels set last year as the market easily absorbs the new student housing beds that get delivered.

Investors in student housing have been very busy during this spring and early summer. They bought $8.4 billion in student housing properties over the 12 months ending in the second quarter, according to data from New York City-based research firm Real Capital Analytics (RCA). That’s a sizeable increase from $5.4 million the year before. But the big surprise is that most of those sales happened after January 1. As of August, investors bought $5.7 billion in student housing properties in 2016, up from $3.7 billion over the same period in 2015.

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Aug
22

So, What is the White House Worth?

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White-House-For-Sale1600 Pennsylvania Avenue is not the average starter home.

President Barack Obama and his family will be moving out of the White House in a few months. But as far as we know, they aren’t looking to sell. Of course, it’s not in any president’s power to actually sell the White House, and it’s unimaginable that the historic home will ever be sold.

But what if it did? How much would 1600 Pennsylvania Avenue fetch on the market?

Barrons wanted to find out, and Ann Gray, of the Los Angeles–based Gray Real Estate Advisors, estimates that $90 million would be a fair price for the president’s residence. The ballpark figure came after the realtor incorporated factors such as the cost of construction ($232,000 in the 1790s, or about $100 million today), potential rental operating income from the home’s 16 bedrooms ($5 million a year), and the market price for comparable properties (Donald Trump’s 17-acre Mar-a-Lago Club in Palm Beach is valued at $100 million).

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Aug
19

Homeownership Rate Hits 51-Year Low

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July16Mkt_6-1The homeownership rate in the United States tumbled to a five-decade low during the second quarter of 2016, according to data released by the Census Bureau on July 28. At 62.9%, the homeownership rate is exactly where it was in the first quarter of 1965 when “The Sound of Music” was on cinema screens and “Downtown” by Petula Clark was at the top of the charts.

After peaking at 69.2% in the fourth quarter of 2004, the percentage of households owning homes took a nosedive in the face of the worst recession since the Great Depression and unfavorable demographics. The extent of the drop-off in the homeownership rate cannot be over-dramatized.

Between 1965 (when the Census Bureau first began to collect this data) and the deep recession of the early 1980s, the rate grew at a slow and steady rate, peaking at 65.8%. After a 15-year interlude, the number of homeowner households exploded during the mid- to late 1990s, thanks to an assortment of political and economic factors that made homeownership a particularly attractive form of housing tenure.

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Aug
05

Increased Office Density Causing Parking Problems

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Parking-Lot-FullAs companies squeeze more employees into less office space – in an effort to increase efficiency and productivity — landlords are facing a dilemma: How can they accommodate increased parking demands? And, what happens if a space becomes unleasable because of inadequate parking?

This quandary is especially true in suburban markets not served well by mass transit where employees are dependent on cars. These buildings’ parking lots are becoming clogged, and landlords are looking for creative solutions.

What’s driving the space reduction? In addition to cost savings, today’s employee work habits are spurring the downsizing of office space. Collaborative, flexible workspaces are replacing big, private offices and fancy conference rooms.

“It’s been an easy transition because, just as companies are trying to get more efficient and save money, millennials are more open to the idea of less hierarchy in real estate,” Christian Beaudoin, director of corporate research for JLL in Chicago, told Hightower in an interview. “So those two trends have combined at the same time — companies trying to save money and millennials entering the workforce, who value compensation and freedom and flexibility more than they do a big office.”

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Aug
04

Self-Storage Cap Rate Compression Slows

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self-storage3The self-storage sector’s appeal seems to defy convention. Self-storage assets lack the architectural themes and fine details that produce trophy properties in the office and retail sectors. No gleaming lobbies or guest amenities like the hotel sector. Yet investors have recognized other virtues in the self-storage asset class and driven cap rates down by 275 basis points in recent years, a pace of almost five basis points per quarter, according to a recent assessment from real estate services firm CBRE.

Now, however, cap rate compression in the sector is slowing down. After the close of the first quarter of 2016, the average cap rate on transactions was 5.70 percent, a change of four basis points. True enough, the drop in cap rates has slowed, but rates are still moving in a direction that is benefitting investors and owners.

“People love storage,” says Chris Sonne, executive vice president and national self-storage valuation group leader in CBRE’s valuation and advisory services division. “While there wasn’t a lot of activity in any sector in terms of transaction volume, when you compare that to declines in other asset classes, like office, self-storage was impacted the least.”

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Jul
26

Property Sales Take Hits, Keep Punching

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RCA_Logo_highresThe topline figure for the first half of 2016 shows a 16% year-over-year decline in the volume of significant US commercial property sales, Real Capital Analytics says in its latest US Capital Trends report. Yet RCA cites “healthier trends” behind the headline.

“The commercial property investment market weathered three significant shocks” in the year’s first half, but has rebounded with “an upward trend in prices and ongoing investor interest,” according to the USCT report. The series of shocks began with turbulence in the financial markets early in the year, continued through an 18% Y-O-Y volume decline in property sales during the first quarter and concluded with the unexpected results of the UK referendum on leaving the European Union.

“The market has weathered these shocks with pricing largely intact,” according to RCA, which says the headline decline in H1 deal volume to $219.2 billion is “a little misleading.” In fact, RCA attributes much of the decline in deal activity to a limited number of portfolio and entity-level deals in the year’s first half, a trend that RCA says is in keeping with less investor demand for risk investments.

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