the Editors of Commercial Property Executive
Executives Show Signs of Optimism Despite Sliding Sales
The outlook of consumers and shopping center executives alike continues to be mixed at best. In widely reported results released on Friday, consumer sales dropped 0.3 percent from July to August for a nationwide total of $381.2 billion, according to U.S. Census Bureau estimates. Overall, the retail picture continues to suffer by comparison with last year. In the most recent monthly survey of shopping center executives conducted by the International Council of Shopping Centers, about 68 percent of executives reported that the number of cars in their parking lots had declined compared to August 2007. Sales, customer sales and occupancy…
Conservatorship Affirms Multi-Family Commitment
The two giant government-sponsored entities, Fannie Mae and Freddie Mac, always had the implicit backing of the U.S. government. But that unspoken backing gained official status in September when the government placed the two troubled giants into conservatorship.The new agency that oversees the two GSEs, the Federal Housing Finance Agency, released a statement on Sept. 12 emphasizing its commitment to the multi-family market.“FHFA recognizes the importance of all aspects of the enterprises’ multi-family businesses–including the LIHTC (low-income-housing tax credit) area and liquidity facilities for remarketed mortgage revenue bonds–for a healthy secondary market and housing affordability. In particular, support for multi-family…
Exports Offer Lifeline as Ike Aftermath, Lehman Aftershocks Loom
In a business climate hammered by a slowing economy, the Gulf Coast storms and the weekend’s failure of Lehman Brothers, the improving U.S. export market is arguably the main factor keeping demand for distribution and manufacturing space afloat. According to figures released on Thursday by the U.S. Commerce Department’s International Trade Administration, exports through July rose 18.3 percent. Canada led the top four buyers of U.S.-produced goods markets, tallying $158.7 billion through the first seven months. Mexico, China and Japan rounded out the rest of the top four.The next few weeks will also start to reveal the repercussions of the…
Party Conventions Prove Shot in City Lodging Arms
The hotel industry continues to see some troubled times, but the recently concluded political conventions certainly gave the lodging markets of Denver and Minneapolis welcome boosts.For the week ending Sept. 6, Minneapolis, site of the Republican Party get-together, had the biggest RevPar increase among all U.S. cities, at 143.4 percent, according to Smith Travel Research. The Democratic Convention gave Denver a similar bump, as RevPar was up substantially, by 140.8 percent, for the week ending Aug. 30. By comparison, RevPar for all U.S. hotels increased by only 1.4 percent for the week ending Aug. 30 and tumbled 6.2 percent for…
Work Commences on 1.1M SF Arm & Hammer Plant in Pennsylvania
A 232-acre parcel of land in Jackson Township, Pa., will soon become home to household and special products manufacturer Church & Dwight Co.’s new Arm & Hammer integrated laundry detergent manufacturing plant and distribution center, now that ground has broken at the York County site. The new 1.1 million-square-foot facility (pictured), to be located about 25 miles southwest of Scranton and 100 miles north of Philadelphia, will allow Church & Dwight to bring all five of its Central New Jersey operations under one green roof. The price tag on the entire project, from land acquisition to build-out, is $170 million….
For Sale: Historic Hollywood Theater Listed at $31M
Located on the Hollywood Walk of Fame, the El Capitan Building–where Disney premieres each of its new movie releases–was listed for sale Wednesday with an initial price tag of $31 million. The building (pictured), located at 6834-6838 Hollywood Blvd., is being sold by its owner, CUNA Mutual Group and will be marketed by CB Richard Ellis Inc. The six-story, 85,000-square-foot, Class A building includes the movie cinema, office space and a retail store. Known as a tourist draw, it is located directly across from the Kodak Theater, where the Academy Awards are presented. The owner renovated the office building with…
Tough Job Market Promises Impact on Occupancies, Rent Growth
With the office sector marred by a floundering job market, the National Association of Realtors anticipates a vacancy rate of 14.4 percent in the second quarter of next year, up from 12.9 percent for the same period this year, according to its latest Commercial Real Estate Outlook. Annual rent growth should continue to shrink, having averaged 8 percent last year and likely dropping to 3.2 percent this year and actually turning negative by 0.4 percent next year as net absorption hits an expected 14.7 million square feet in 2008 and 10.9 million in 2009–a far cry from the 57.3 million…
Exports Help, but Industrial Sector Stays Sluggish
U.S. industrial markets stayed sluggish during the second quarter, according to the latest SIOR Commercial Real Estate Index, compiled by the Society of Industrial and Office Realtors in conjunction with the National Association of Realtors. Accordingly, their index measuring industrial performance tallied 68.5 points, more than 53 points lower than the index’s highest score—netted in the first quarter of 2006. A score of 100 points represents a balanced marketplace.Prospects for the next several quarters remain dim. While the weakened dollar has bolstered exports, the National Association of Realtors is predicting in its latest Commercial Real Estate Outlook that the sector’s…
Lodging Investment Slows, Led by Domestic Buyers
Hotel sector investment sales took a hit during the first half of the year. U.S. hotel sales volume plummeted 79 percent to $7.3 billion in the first half of 2008 compared with the first half of last year, according to Real Capital Analytics’ Hotel Capital Trends Quarterly report. That represents the lowest sales volume and largest percentage drop of any property type during the first half of the year. On a worldwide scale, global hotel sales dropped 68 percent. Interestingly enough, average pricing per unit reached its highest point ever–$175,000 per unit. That is largely attributable to sales of high-end,…
Rising Food, Energy Costs Deliver Blows
The National Association of Realtors projected in its latest Commercial Real Estate Outlook that retail sector vacancy rates will rise from 9.7 percent in the second quarter of this year to 10.4 percent in the second quarter of 2009, as rising food and energy costs continue to impact consumer purchases. Average rents are expected to move accordingly, with growth shrinking from 3.2 percent last year to 1.2 percent this year and dropping by 0.9 percent next year. Yet net absorption, which totaled 11.1 million square feet in 2007, should turn negative this year as retailers suffer more in the second…