the Editors of Commercial Property Executive
U.S. Infrastructure at Crossroads: Report
With $132 billion having been set aside in the stimulus package for road, highway and various other transit related projects across the United States, the issue of the country’s outdated infrastructure is at the forefront. The Urban Land Institute and Ernst & Young note in a new report that while the funding will certainly boost the job market, what is of even more vital importance is a long-term infrastructure plan for digging the nation out of an economic slump and shoring up the country to be competitive on an international level in the future. “This is about assessing where we…
Big Ticket M-F Financing Deals Continue to Flow as Camden Closes $420M Loan
Despite real estate market turmoil, sizeable multi-family financing deals continue to roll in, and Camden Property Trust has just joined the ranks of apartment property companies that are benefiting from government-controlled mortgage giants Fannie Mae and Freddie Mac’s ongoing willingness to dole out money. Houston-based Camden just closed a $420 million secured credit facility with Fannie Mae DUS lender Red Mortgage Capital Inc. The financing came in the form of a 10-year facility carrying an annual 5.12 percent fixed interest rate, with interest only payments. Camden put up 11 of its apartment properties as collateral for the loan, which matures…
Colliers: U.S., Canada Office Markets Backslide in Q1
The United States office market continued its descent in the first three months of 2009, making it the worst quarter since the third quarter of 2001, according to a recently released Q1 office report from Colliers International. National office vacancies continued to grow, rising by 95 basis points, from 13.80 percent at year-end 2008 to 14.75 percent at the close of the first quarter of 2009.The report indicates that there has been an additional growth in space available for sublease. Nationally, total ready for use sublease space rose by 7.5 million square feet during the first quarter, registering 81.6 million…
Global Recession, Credit Crunch Stall Europe’s Shopping Center Pipeline
Shopping center development plans in Europe have done an about face, according to real estate services firm Cushman & Wakefield’s latest European Shopping Centre Development report. The recession and the scarcity of financing have forced projects to be placed on the back burner or scrapped altogether, which, come 2010, will have caused the first decline in new shopping center space in five years. Approximately 10 million square meters of new space–most of which was planned two or so years ago when demand was high and financing free flowing–is presently on target to come online this year, denoting a 1 million-square-meter…
Report: Moderately Healthy Prognosis for Medical Office
While hardly immune from the ills that have plagued other property types, the medical office sector is holding its own better than most other commercial real estate categories, according to an analysis by Marcus & Millichap Real Estate Investment Services Inc. Medical office buildings are benefiting from the aging of the population and rising health care costs. Even though regional markets for medical office buildings tend to track the regional economy and mirror commercial real estate markets generally, any downward impact tends to be softer. Like developers in other specialties, medical office builders are adjusting to changing economic conditions. A…
Even in Downturn, Retail Grows More Global
Even though an uncertain economic outlook will force many retailers to delay their global expansion strategies for the moment, retail itself is becoming more global every year, an annual survey by CB Richard Ellis Inc. has found. The 280 leading retailers surveyed were present in an average of 16.5 countries by the end of last year. That represents a 12 percent uptick from 2007, when the retailers had stores in an average of 14.7 countries. more countries by the end of 2008 than they were the previous year. A principal engine for growth was European luxury retailers, especially from Italy,…
Economic Update – Commercial RE on the Edge?
The idea that commercial real estate might be the next big thing to implode–which is all too familiar within the commercial real estate industry–is finally getting some mainstream attention. On Saturday, speaking at a conference at Vanderbilt University, Atlanta Federal Reserve Bank president Dennis Lockhart said that “on our watch list this year, as a risk to the (U.S. economic) outlook, is continuing worsening in the commercial real estate sector.”Earlier last week, Lockhart waxed a bit more optimistic by asserting that the economy might experience “slow and tentative growth” as early as the third quarter of this year. On the…
Economic Update – RE Valuation Remains Missing Link
One rippling effect of mall behemoth General Growth Properties’ bankruptcy may be that it will help re-establish something that’s been missing from much of the commercial property investment market for a while now: pricing.Sellers have been sitting on the sidelines, and so have buyers, waiting. GGP can no longer warm the bench regarding the disposition of at least some of its properties now. The market will thus ascertain those prices, probably to the benefit of healthier REITs and other major potential buyers, such as Simon Property Group or Vornado. High-profile bankruptcy sales may not be the only way for commercial…
CMBS Shutdown May Have Sealed General Growth’s Fate
The drying up of CMBS financing played a significant role in General Growth Properties’ decision to seek Chapter 11 bankruptcy protection, according to one retail analyst. Steven Marks, a managing director & senior REIT analyst for Fitch Ratings, pointed out that General Growth, the second largest owner of retail malls in the U.S., shouldered a huge debt burden that stemmed largely from its $12 billion acquisition of The Rouse Cos. in 2004. More than four years later, two elements of that transaction came back to bite General Growth: the Rouse corporate debt assumed by General Growth as part of the…
Office Vacancy Reaches 3-Year High in Q1: Cushman
U.S. office vacancy rates for central business districts reached their highest level in three years during the first quarter, according to services firm Cushman & Wakefield Inc. Overall CBD vacancy jumped from 11.2 percent at the end of the 2008, to 12.5 percent in the first quarter of 2009.That reading is the highest since the first quarter of 2006, when it was 12.6 percent, but is still below its decade high of 15.5 percent in the second and third quarters of 2003, the report stated. The vacancy rise in the first quarter coincided with a 39.3 percent decline in overall…