the Editors of Commercial Property Executive
Economic Update – The Economy’s Latest Buzz-Phrase: ‘Better Than Expected’
“Better than expected” is the latest turn of phrase commonly used to describe lousy performance by companies that isn’t quite as lousy as analysts predicted, and as such the phrase might have a longer shelf-life than “green shoots.” Since lousy is the new normal, then “better than expected” is what Wall Street now rewards. Few industries have a more lousy new normal than retail. Take the do-it-yourself chain Lowe’s Cos., for example. DIY is a retail subset that took it particularly hard even before the Panic of 2008 last fall, since it’s a business that develops pneumonia whenever the housing…
Despite Challenging Economy, KKE Sees Opportunities for Growth
Even as difficult economic times continue, KKE Architects Inc. sees opportunities for growth. Although development has slowed down, the firm is busy with more than 15 million square feet of projects, including a proposed 2 million-square-foot mixed-use development, The Marketplace at El Paseo, which is set to break ground in El Paseo, Calif., in 2010. The firm is also working on a 3 million-square-foot expansion of the Mall of America in Bloomington, Minn.Additionally, the firm has recently opened nearly 3 million square feet of projects, including the final phase of Jess Ranch Marketplace in Apple Valley, Calif., as well as…
April Brings Surprise Revival of Global RE Stocks
For commercial real state concerns around the world, it appears that the light at the end of the tunnel is getting brighter, at least as far as equities are concerned. Buoyed by successes in raising capital and improving balance sheets, property companies saw their stocks rally significantly, experiencing a total return of more than 20 percent in April, according to a new report by ING Clarion Real Estate Securities L.P. Looking at the major regions across the globe, North American real estate firms topped the list with returns totaling 30.7 percent. “Stocks, in our opinion, were oversold in the first…
Despite Spring Thaw, Harsh Forecasts Continue for Retail
The retail sector’s current distress will eventually provide ample opportunities for investors and retailers. But the slight spring thaw in consumer attitudes about retail will not be enough to prevent harsh conditions for the rest of the year, according to multiple national assessments of the retail sector published during the past week. “Though contraction will be the harsh reality for most, the strongest concepts will benefit, not only from the elimination of their competition, but from the best tenant’s market in decades,” Colliers International’s spring survey concludes. On the other hand, recent indicators of improving consumer confidence are still a…
Economic Update – Despite Recession, Green Building Continues Apace
Hard times may have come to property development and construction, but that doesn’t mean that green building ideas have lost all of their momentum, in either public or private spheres. In public development, which includes examples of early adopters of green building techniques in the first place, various governments are still pushing hard for green. Late last week, the U.S. House of Representatives passed H.R. 2187, also called the 21st Century Green High-Performing Public School Facilities Act, by a vote of 255 to 177. H.R. 2187 is a $6.4 billion school modernization bill with the specific goal of building new…
Pre-ICSC: Leaner, Value-Driven Model in Store for Retail Sector
After two years that have trimmed the retail field and chastened the remaining players, the most compelling questions concern what retail real estate will look like when it inevitably mounts a comeback. A preview suggests that by early in the next decade, retail real estate will look much different from the pre-recession model.The full implications of the retail industry shakeout will take several years to unfold, but the shrinking field of retailers will continue to pose challenges for several years. It should take several years for the industry to absorb the demise of dozens of leading brands like Circuit City,…
Economic Update – Wal-Mart Sees Flat Profits, but Still Looks to Global Growth
First-quarter numbers are in from Wal-Mart Stores Inc., and they show that the retail giant continues to attract recession-weary U.S. consumers, but other factors beyond its control have been keeping the retail behemoth from posting higher profits. According to the company, profit in its first fiscal quarter, which ended April 30, was about the same as a year earlier, $3.02 billion, or 77 cents a share. Not shabby, but not what Wall Street expected. The main drag on company profits was the fact that sales internationally were down 11 percent during the first quarter, affected by that curiously strong U.S….
Location Key for Planned New Jersey Office Redevelopment
Banking on an advantageous location to attract tenants in a shaky economy, The Hampshire Cos. purchased a 98,400-square-foot, four-story office building on a little more than 19 acres in Iselin, N.J. Hampshire Global Partners, an entity controlled by The Hampshire Cos., plans to re-develop and upgrade the office building and develop the rest of the site. “The new owners plan to redevelop the property. They will turn the existing building into a Class A property. It is currently C or D. They’ll do that now and develop the balance later,” Jeffrey Dunne (pictured), vice chairman in CB Richard Ellis’ New…
Panel: Gov’t Programs to Unfreeze Lending May Prove Effective, but Will Take Time
The alphabet soup of government programs, from PPIP to TALF, introduced by the federal government to thaw the frozen credits may very well succeed in that mission–but the medicine will take time to take effect, a panel convened by Ernst & Young in New York concluded. The panelists expressed hope that the Term Asset-Backed Securities Loan Facility, or TALF, which was recently extended to CMBS, and extended to five-year terms to better match CMBS loan lengths, will have a positive effect. TALF, originally conceived as a vehicle to re-start investment in securities backed by credit card and auto loans, got…
Despite Economy’s Rumblings, Philadelphia Looking Up
Consider the next few months a window of opportunity. That was the message delivered by Joel Naroff, chief economist for TD Bank N.A. and president of Naroff Economic Advisors, speaking on the opening panel of CPN’s Hidden Opportunities conference in Phialdephia on Wednesday.While Naroff does not see the economy really recovering for five to as much as 10 years, he expects the Federal Reserve and the Treasury Department to take some steps very soon to “soak up all of that liquidity (they have taken on) as quickly as possible.” Specifically, he warned, interest rates are likely to move up rapidly…