Browse Month: May 2013

Jones Lang On The Global Commercial Real Estate Picture: Positive Overall

JLL Global CRE Presentation 2013I

n a recent webinar conducted by Jones Lang LaSalle, analysts predicted commercial real estate would continue to perform well on whole, with most major international metropolitan areas growing in the 0-5% range this year.  Slides from the webinar are included for download below.

Selected highlights from the JLL May 2013 webinar:

  • Leasing volumes remain flat, with corporate tenants exercising caution
  • Yet, transaction volumes are up 20% across the board
  • Office rents are falling in Amsterdam, Paris CBD, Beijing and Milan
  • Office rents have bottomed out in Chicago, Sydney, Brussels and Washington DC
  • Asia-Pacific office leasing activity year over year is down an alarming 20%, yet the gloabl picture remains “flat”
  • Of Europe, Asia-Pacific and the US, consumer confidence is highest in Asia-Pacific

And more — to see the full presentation slide stack, download from Jones Lang here.

Wal-Mart vs. Hospitals? The Retailization Of Healthcare Continues

The delivery of primary healthcare services on chain retailer floorspace – sometimes referred to the retailiziation of healthcare – is underway.  Signs include:

  • Walgreens pharmacists administered shots 5.5 million times out of the 9 million flu vaccines they delivered
  • Industry estimates that there are now more than 1,400 clinics in retail chain stores, double the number six years ago.
  • It is projected that by 2016, the number of retail convenient care clinics (CCCs) will double to 3,000
  • Nearly 30% of the US population lives within a ten-minute drive of a retail clinic. That number rises sharply for chain retail, showing the way forward expansion-wise
  • The demand for CCCs is rising as demand for healthcare generally rises thanks to the Affordable Care Act provisions ending  the situation of 30+ million uninsured

Patients Are Already Shoppers

Retail owners, managers and brokers contemplating new transactions and space apportionments have to add this newest wrinkle into pro formas far and wide; there are two waves of patients who are also shoppers headed to these clinics.  The first wave comes from the greying of the baby boomer generation, a demographic consumer of healthcare services up to three times the average of other demographics.   The second wave comes from the previously uninsured under the Affordable Care Act.  There will be a scramble to marry the convenience of retail locations with the medical needs of these patients.

Supply Chain Experts Expected To Step Up

Chains such as Wal-Mart dominate supply chains and may be leading the way toward the critical rethinking of medical services as one more service in a supply chain.   According to this video from the consultants Advisory Board Company,  the Walton family retail juggernaut has has unveiled their plans to have primary care services available in rural markets within five to seven years.

While the specific future isn’t clear, we can be sure that the era of the hospital and medical office building as the default locations for medical services is coming to an end.

CUSP: Studying Where New Energy Policies Meet The Commercial RE Market

The emergence of energy disclosure regulations aimed at building sustainability and addressing energy waste has New York City as its center. Since we can probably expect similar legislation efforts in cities across the US in the future, where can we turn to learn as much as we can about how sustainability policies impact the commercial real estate market?

NYC’s Greener, Greater Buildings Plan

Last year, New York City passed a package of initiatives called the Greater Greener Buildings Plan (GGBP).  The energy disclosure policy regulatory efforts combined with job training initiatives aim to address energy usage and waste in Gotham’s largest buildings  – about 15,000 of them at over 50,000 square feet.

GGBP creates piles of data on energy usage, data that allows owners to understand the specifics of usage beyond what energy bills say.  And the program claims it will create over 17,000 construction jobs along with a $7 billion net energy savings.

But how do these efforts get to the point where the value is made clear to owners and investors?

On The CUSP Of Greater Understanding

The national effort involves industry partners, national laboratories, universities, and NYC governmental agencies with intent to use information sciences and data analytics to improve the quality of life in cities along with the economic efficiency, the resilience and resource efficiency of cities.  Examining the implications of the energy disclosure policies and how they will impact commercial real estate markets is the role of CUSP, The Center For Urban Science Progress located, fittingly enough, at NYU.

The ability of today’s building owners to collect and process data is unsurpassed.  In commercial real estate, sustainability is less a collection problem and more of a measurement problem.  Finding what the right metrics are and what real data points lie behind them are essential in order to make the right decisions for operations.  This goes from energy consumption to measurements of indoor air quality and its impact on occupational health, to measuring the effects of better daylighting on profitability.

That’s the role of CUSP – to learn the full measure of methods to make the strongest case to the investor that sustainability is not just a feel-good, but a value proposition.

To learn more about CUSP, check out the CUSP website.

 

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What Life Insurance Companies Are Lending To New Construction?

Image representing MetLife as depicted in Crun...

If you’re not used to seeing news of life insurance companies lending into new construction projects, you’re not alone.   The life business is shy around multifamily projects for reasons of institutional culture — life companies would rather not risk ending up as landlords to their own beneficiaries with all the potential PR disaster that might entail when it’ time to evict a tenant.

Office projects also tend to show down lender enthusiasm  in that sector, with tenants again the reason, albeit in a different way.   Unless the office leasing is done in full ahead of time, the project takes on a speculative flavor in the eyes of the guys and girls who play with actuarial tables for kicks.

Lenders generally are also looking at financing more retail and office development, “although one of the themes of 2013 is strong preleasing,” said Bill Cotter, the northeast division manager at Wells Fargo Commercial Real Estate. “There won’t be much spec construction; you won’t see any empty office buildings.”

Against the backdrop of a persistent credit crunch, life insurance companies are increasing their stakes in new construction.

Life insurance companies, having largely disappeared from the scene during the darkest days of the recession, are also starting to become more active, according to Tim Wright, senior managing director for Holliday Fenoglio Fowler LP. There were five large insurance companies — MetLife, Prudential, Nationwide, Lincoln National and Principal Financial Group —  making construction loans before the bubble burst.

“When the market came back there was really one or two out there,” Wright says. “But slowly the market is starting to deepen. Right now there are three to four legitimate life insurance companies starting to consider permanent construction financing in new developments.”

Atlanta Leading The Way?

As usual, national trends are unevenly spread, with some markets showing distinct compositions that we haven’t seen since before the recession.  In Atlanta, a set of major projects describes what happens when banks back off their central role of allocating capital and life insurance giants step up:

Among the life insurance-financed projects in metro Atlanta, Northwestern Mutual Life Insurance Co. is the equity partner and lender for a 23-story mixed-use tower with 330 luxury units at 12th & Midtown, the $1 billion mixed-use development at Peachtree and 12th streets involving Daniel Corp. andSelig Enterprises Inc.

In west Buckhead, MetLife bought the luxury apartment known as “The Rocca” and an adjacent site to develop a similar project. It spent a combined $23.1 million. MetLife is the capital partner on the redevelopment of The Rocca and the adjacent site, and Daniel Corp. will handle the development and management.

In central Buckhead, USAA Real Estate Co.and developer JLB Partners L.P. formed a joint venture on a 375-unit apartment building that has been under construction for months. The five-story building at Pharr and Peachtree roads will be known as Village at Buckhead and could be completed as early as this fall.

After a construction boom that created a glut of empty intown condo towers and office buildings, metro Atlanta has seen a historic slowdown in its development pipeline, and lenders remain selective about what projects they will touch.

The moral of the story: when credit gets tight, expect opportunity from unusual places.

 

The Oklahoma Housing Foundation REALTOR® Disaster Relief Fund

Oklahoma AOR Logo

In the wake of devastating tornadoes which have caused so much damage to our friends in Oklahoma, the Oklahoma Association of REALTORS® formed a relief fund to assist REALTORS® and their families. Please click on the link below to read more about the efforts being undertaken and, if you have the means, consider donating to this newly formed  501 (c)(3) charity.

http://www.oklahomarealtors.com/about-oar/oklahoma-realtor-relief

A big THANK YOU to the Oklahoma AOR for showing the country the REALTOR® family is willing and able to help each other in this time of need.  Our thoughts continue to be with those affected.

Oklahoma Housing Foundation

 

 

 

When Tiny Becomes Taboo: NYC Fining Agents For Showing Illegal Apartments

As reported in Realtor.com’s RealtorMag  and the New York Times, NYC apartment leasing agents and brokers are being fined for showing apartments and subleases that meet the definition of illegal dwelling.  In New York City, agents and companies are now culpable when dwellings that fall out of code are shown to prospective tenants; as of April 29th, ten agents in NYC were fined thousands of dollars for doing so.

While there is plenty of argument about what constitutes code compliance and many REALTOR voices decrying what they see as added unfair responsibility to determine that compliance, the bulk of the fines given were for dwellings that did not have two means of egress.

When a leasing agent professional says she can’t know if the plumbing or electrical in a building is up to code, that makes a lot of sense. Buildings potentially hide a great number of flaws that can escape the agent’s notice just like they escape the landlord’s.

But when the bulk of the issued fines, as reported, are for showing properties that fail to have two means of egress — e.g. no back door — the complaints about unfairness become a little harder to swallow.  How exactly does that escape notice during a showing?

The Worst Room

How small can it get in an NYC apartment?  That happens to be the very subject of a fascinating new real estate blog The Worst Room featuring photos of eye-popping dwellings complete with sublet prices.  Strap yourself in:

East New York, Brooklyn. $600.00 “NO STOVE POWERFUL MICROWAVE ONLY” “FOR SINGLE MAN ONLY”
Union Square, Manhattan. $1000.00
“I am looking for someone to move into a large closet space in one of the three bedrooms of my apartment. The bedroom has two closets but there is no need for it so we are looking to sublet it as a living space to a 4th roommate. The closet is about 5 feet wide and 7 feet long. It has no windows and think it would be ideal for a twin size bed and small night stand.”
“Amazing Location”
Upper East Side, Manhattan. $1600.00 (Twin bed with Fax Machine)

This one’s not as crazy as it seems.  If the heat in the place isn’t what it could be, just have someone send you some faxes until you’re blanketed in paper.

Check out the entire The Worst Room site here.  If you can stand the claustrophobia, I mean.

West Metro BOR (GA) Commercial Caffeinated Breakfast

West Metro BOR Logo

The West Metro Board of REALTORS®  is hosting its first Commercial Real Estate Networking event.

A great opportunity to meet with other commercial practitioners.

Location:

West Metro Board of REALTORS

  • Phone770-832-0804
  • Thursday, May 23 at 8:15 AM to 9:30 AM
  • Where: West Metro Board of Realtors
    154 Bankhead Highway
    Carrollton, GA 30117

Commercial Brokers are invited to  join for a Chick-Fil-A breakfast and presentation by Guest Speaker Dr. Joey Smith of the University of West Georgia who will give a brief update on the West GA Commercial Real Estate Market.

Bring a list of your commercial listings and commercial needs to discuss at a roundtable discussion following the presentation.

Free w/RSVP by May 20th.

For more information or to RSVP contact [email protected]

Realtor.com To Provide Comprehensive Commercial Listings

Presenting the latest press release from Realtor.Ccom about the continuing provision of commercial listings onto the single largest real estate website on the internet.  The bottom line: CommercialSearch.com listings data from Xceligent will be available to Realtor.com users come 3Q 2013.

SAN JOSE, Calif. and INDEPENDENCE, Mo., May 15, 2013 /PRNewswire/ — Realtor.com®, operated by Move, Inc. (NASDAQ:MOVE), and Xceligent, Inc., a leading provider of proactively researched commercial real estate information and marketing, today announced a strategic agreement to launch enhanced commercial search functionality on realtor.com® the official website of the National Association of REALTORS®.

As a result of this agreement, in the third quarter of 2013, Xceligent-owned site CommercialSearch.com (“CommercialSearch”) will begin powering amplified commercial functionality on realtor.com®. Realtor.com® users will have access to the hundreds of thousands of commercial listings Xceligent has aggregated into CommercialSearch from multiple sources including: its fully-researched markets, hundreds of MLSs, CIEs (Commercial Information Exchanges) of every market size, and the majority of the top 50 companies who provide commercial listings in the country. This combined information availability has made CommercialSearch one of the largest content sources of any public facing commercial real estate marketing site.

“Over the last few years, we have seen increased investor activity in the residential housing market.  Many career real estate investors begin by investing in residential and eventually transition into commercial as they expand their portfolios,” commented Errol Samuelson , president of realtor.com®. “Enhancing our commercial real estate search bridges the information gap for residential real estate investors who cross over into the commercial space. CommercialSearch’s robust data set and primary sourced data made it a natural fit with realtor.com® and its commitment to accuracy and the industry.”

That primary sourced data that will soon be available to realtor.com® users comes from Xceligent’s flagship research product, CDX, which relies on hundreds of researchers proactively gathering information on every commercial building in a market. Currently in over 40 markets and rapidly expanding into the largest 65 markets, this data has helped create the foundation of CommercialSearch’s national listing content. Additionally, any agent in any US market can currently contribute listings directly to CommercialSearch, thereby adding to the content that Xceligent’s research team is providing to CommercialSearch as a marketing benefit for the members of its main research system.

“Realtor.com®‘s unparalleled credibility and reach paired with our unique ability to aggregate a national commercial inventory make this an alliance very powerful,” Xceligent CEO Doug Curry says. “We are confident that this agreement will provide an unrivaled value proposition through our new industry standard marketing platform and bring extraordinary exposure to the commercial listings marketed through CommercialSearch.”

Last year, the National Association of REALTORS® announced a strategic alliance with Xceligent. As part of the REALTOR Benefits® Program, Xceligent is the National Association of REALTORS’® exclusive provider of commercial real estate information services. For more information about realtor.com® commercial listings or CommercialSearch, please visit:

http://commercial.realtor.com/?iid=rdc_hdr_commercial and http://www.commercialsearch.com/.

Announcing the 2013 Innovation Grant Recipients

Commercial Real Estate REALTOR Logo

This year NAR Commercial has the pleasure of announcing the following boards/associations and the title of their submissions as recipients of the 2013 Innovation Grants:

South Texas Commercial Association of REALTORS® (TX)

Commercial Membership Information Marketing Video

New Hampshire Commercial Investment Board of REALTORS® (NH)

Commercial Education CE Course and Networking

Greater Tampa Association of REALTORS® (FL)

Commercial Ambassador Program

Greater Washington Commercial Association of REALTORS® (MD)

New Member Growth & Development Initiative

Scottsdale Area Association of REALTORS® (AZ)

1st Annual Scottsdale Commercial Real Estate Summit

Arcadia Association of REALTORS® (CA)

Commercial Day at the Races Panel, Open Forum & Networking

Mississippi Commercial Association of REALTORS® (MS)

“Future of Commercial Real Estate” Panel, Education & Networking Event

Commercial Association of REALTORS® Wisconsin (WI)

CAR “Rainmaker” Series with professional development and networking

Rhode Island Commercial and Appraisal Board of REALTORS® (RI)

Defining Better Spaces: Collaboration within Public/Private Sectors in Retail Industry

Greater Columbia Association of REALTORS® (SC)

Commercial Education & Networking Event w/Livestream

Indiana Commercial Board of REALTORS® (IN)

Electronic CEU Tracking System for Annual Conference

St. Louis Association of REALTORS (MO)

New Commercial Member Orientation Digital Gaming Experience

Vermont Commercial Investment Board of REALTORS® (VT)

Commercial Networking & Signature Series Speaker Event

Memphis Area Association of REALTORS® (TN)

Commercial Day of Education

Southland Regional Association of REALTORS® (CA)

Investment Real Estate Symposium as FREE benefit to members

Sacramento Association of REALTORS® (CA)

Large-Scale Multi-Property Economic Forecast

Beverly Hills/ Greater Lost Angeles Association of REALTORS® (CA)

Business Roundtable for local businesses and REALTOR® members

Miami Association of REALTORS® (FL)

Member to Member Email Program

West San Gabriel Valley Association of REALTORS® (CA)

Livestream Commercial Day

Eastern Connecticut Association of REALTORS® (CT)

1st Annual Commercial Real Estate Education Conference

Charleston Trident Association of REALTORS® (SC)

Commercial Day of Education with CE as FREE benefit to members

Texas Association of REALTORS (TX)

Commercial Membership Outreach & Recruitment Campaign

Winston Salem Regional Association of REALTORS® (NC)

Commercial Membership Drive targeting non-members

REALTORS® Association of the Palm Beaches (FL)

Commercial Real Estate Symposium in collaboration with local CCIM chapters

Medina County Board of REALTORS® (OH)

“Open For Business” Community Event

We want to thank everyone who submitted an application and encourage them to do so when applications are accepted again. Want to find out more about the criteria for innovation grants? Click here.

Moody’s: Commercial Real Estate Keeps On Improving

Pictures of raised thumbsMoody’s Q1 2013 US CMBS and CRE CDO Surveillance Review is out.  The verdict?  Somewhat slower commercial real estate improvement throughout 2013 but improvement nonetheless.

Sector fundamentals will drive improving market conditions, making a significant rise in losses on loans backing US commercial mortgage securitizations (CMBS) unlikely.

 “Commercial real estate continues to benefit from limited construction and positive absorption, which have supported a positive market dynamic despite lingering concerns about the strength of the economic recovery” says Michael Gerdes, Moody’s Managing Director and Head of US CMBS & CRE CDO Surveillance.

 “As in the fourth quarter of 2012, multifamily and hotel both performed strongly and will continue to do so over the next year, albeit at a more modest pace,” Gerdes adds. “The recovery of office and retail has been more muted, but performance will strengthen in tandem with employment and economic growth.”

 Moody’s central global scenario hasn’t changed.

 “It calls for subdued GDP growth in the US of around 2% for 2013,” says Gerdes. “Business confidence will strengthen as the economy continues to recover at a slow but steady pace.”

[…]

Among the individual sector highlights:

The retail sector will have modest gains, with positive rental growth by the end of 2013. Consumers still appear cautious because of slow economic growth, but the sector is showing signs of life. Vacancy rates declined 30 basis points, the largest drop since 2005.

Office vacancy and rental rates will improve moderately in 2013, with market performance differentiating according to regional employment growth. In addition, absorption is likely to continue to outpace completion in the next few months, which will assist in the sector’s continued slow but steady recovery.

Hotel will continue to grow, but at a slightly slower pace. Year-over-year RevPAR (revenue per available room) was up 6.4% in first-quarter 2013 from first-quarter 2012, with the greatest increases in both chain scale and luxury and hotels. The top market performers were Oahu Island, Hawaii, and Miami-Hialeah, Florida.

Multifamily will also continue to perform well. Absorption continues to outpace completions, and vacancy rates remain low. Rents are still growing but at a slower rate. Fifteen markets had vacancy rates below 4.0%, including Miami and Newark, both of which boasted vacancy rates of less than 3%.

The full report is available for Moody’s subscribers at http://www.moodys.com/research/Q1-2013-US-CMBS-and-CRE-CDO-Surveillance-Review–PBS_SF327646.

 

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