A dramatic drop in completed development will not be enough to offset store closures that will push up retail vacancy to 10.2 percent nationwide this year, according to a new Marcus & Millichap Real Estate Investment Services Inc. projectionAlthough new inventory will decline to 90 million square feet in 2008, a 40 million-square-foot drop, the shrinking volume of new product is failing to offset the increasing momentum of store closings. Marcus & Millichap anticipates vacancy to jump 170 basis points this year as a result. Bankruptcies and store closings should characterize 2009, picking up where 2008 left off. When final…

The U.S. experienced an 82 percent drop in hotel transaction volume during 2008, from $45 billion in 2007 to $8.2 billion, based on transactions of at least $10 million. As a near-term market recovery is unlikely, volume is forecast to soften to $7 billion this year.The first half of 2009 will be as idle as late 2008, but more divestment activity is forecast for the second half, as some owners make strategic decisions, sometimes on an unwilling basis, to dispose of assets even while pricing remains relatively weak.Though equity is available in the marketplace, it is not yet ready to…

In the last hotel industry downturn, in 2002, the extended-stay segment proved one of the strongest performing lodging sectors, as it is somewhat resistant to economic downturns. Government contractors, military personnel and IT professionals, which are less sensitive to economic cycles, are heavy users of extended-stay product like.That benefit has not gone unnoticed by major hotel companies. In recent years, Starwood Hotels & Resorts Worldwide Inc. has introduced its element by Westin extended-stay offering, and Global Hyatt Corp. has revamped the Summerfield Suites extended-stay brand it acquired from The Blackstone Group L.P. in 2005.Hilton Hotels Corp. is the latest to…

Clearly, the U.S. office market is in the midst of a terrible down market. Expansions are few and far between, and reducing excess capacity is the No. 1 priority for many businesses. As the economy unwinds, companies are faced with an oversupply of space that often ends up on the sublease market. (Year-end ’08 data certainly confirms this trend.) This surge in sublease space is occurring just as most businesses begin a hasty retreat, conserving cash and capital for what might be a prolonged and protracted downturn. The question many are asking is when will the pendulum swing back to…

Serving a large energy sector, Houston’s office market enjoyed a mostly positive 2008. But as oil prices declined in the second half of the year, many tenants in the market have put their expansion plans on hold and are adapting a largely wait-and-see posture. Still, a headlining lease closed as 2009 began.Hess Corp. signed a long-term lease to occupy the entire 844,800-square-foot Discovery Tower under construction in Downtown Houston. Many oil and gas companies, eager to demonstrate their commitment to energy efficiency, have made green office space a priority, and this megalease fits the trend: Discovery Tower is slated to…

A fourth-quarter surge of activity helped pull off a respectable year for New Jersey’s industrial leasing market, and New York and New Jersey ports will continue to drive steady long-term demand for distribution, manufacturing and high-tech facilities. Still, a spate of new construction in the state’s central region may complicate market conditions that are already giving most owners and developers as many challenges as they can handle.Northern and Central New Jersey tallied 17 million square feet of leases in 2008, according to Cushman & Wakefield Inc. That represents a sizable drop from the 23 million square feet leased the previous…

Market-based discussions are back, and among the hot topics is the outlook for Florida’s apartment market, in which investors are probing for opportunities. Apartment values are down between 25 and 45 percent, depending on the submarket. Condominiums have traded for as little as 40 percent of development costs. Is it time to buy?In 2008, Florida experienced a 3.2 percent job loss and ended the year with unemployment at 8.1 percent. The drop in employment has hurt apartment occupancy and rent growth. In the major markets, transaction volume was down between 31 and 77 percent, according to Real Capital Analytics Inc….

Apartment assets in outlying areas of the Boston metropolitan area should see competition from the shadow rental market, but core assets are predicted to outperform, according to a recent Marcus & Millichap Real Estate Investment Services Inc. report. A major question, though, is how job losses will affect the city’s multi-family market.It will certainly suffer as the U.S. recession tightens its grip because renters are likely to transition into less-expensive housing. Class A properties in the outlying suburbs of North Shore and Mystic River North/Route 128, both of which prospered during the housing boom, will compete with shadow rental stock…

On Jan. 28, the International Monetary Fund released a revised “World Economic Outlook Update,” as global economic conditions have deteriorated rapidly since its previous forecast, issued on Nov. 6, 2008. The new forecast takes a particularly pessimistic view even in the current economic climate, significantly scaling back forecasts for global and U.S. gross domestic product growth and global trade. While the new estimates foretell a difficult 2009, long-term data suggest that global trade will rebound strongly as global economic growth stabilizes.The IMF’s 2009 forecast for global growth declined 170 basis points to 0.5 percent, and U.S. projected growth was marked…

Less than two weeks after the transition in Washington D.C., there’s been another leadership transition and a new boss for an enormous economy. That is, Wal-Mart Stores Inc. got a new CEO, Mike Duke, on Sunday. Duke, a Georgia native, has been with Wal-Mart since 1995, and before that spent nearly a quarter-century with Federated Department Stores and May Department Stores.As Wal-Mart goes, so goes the retail business. Last week, Duke told a meeting of Wal-Mart employees, in a presentation that was also webcast, that “sustainability is now even more critical than ever… eliminating waste is more important than ever,…