As economic news has moved from bad to worse over recent months, significant population shifts are occurring throughout the country that will markedly impact the commercial real estate investments over the coming years. Moreover, amidst these shifts, the decade’s population growth has slowed to the lowest level in the past 50 years, all of which points up the need for commercial real estate investors to identify the segments of the population that will have a measurable impact on how things in the real estate world evolve. Those segments, as Nielsen Claritas sees it, are the Baby Boomers, born between 1946…

Though the decision by Circuit City Stores Inc. to go out of business for good is hardly unexpected, the chain’s liquidation will add to the challenges facing retail real estate owners.Circuit City made the announcement on Friday, after efforts to sell the company fell through. In a statement, the retailer said it expected to close its remaining 567 stores by the end of March. The giant electronics chain’s decision came only a few months after it filed for Chapter 11 bankruptcy protection and disclosed plans to close 155 stores in the United States.Thus Circuit City became the retail sector’s first…

The average U.S. hotel is likely to suffer a 5.3 percent drop in occupancy and a 7.9 percent decline in profits in 2009, according to Atlanta-based PKF Hospitality Research. A well-run spa operation can contribute revenue that is likely to be increasingly important for hotels as occupancy contracts this year.Spa services also can define the market position of a hotel, provide a competitive asset that is attractive to multiple demand segments and diversify a hotel’s revenue stream. These benefits could be especially valuable for hotels seeking to differentiate their product, increase their market share, achieve revenue stability and maintain profitability…

The global economic slowdown and greater difficulty in financing hotel development has translated into a diminishing hotel development pipeline. According to a Lodging Econometrics report, the total global construction pipeline declined 6 percent to 10,169 projects and 1.7million rooms during the third quarter of 2008. The second quarter represented the pipeline’s peak, and all regions reached cyclical peaks in the second quarter of 2008, except for Canada, the Caribbean, Mexico and Central and South America, which reached their peak in the first quarter of last year.All regions declined from the second quarter to the third. The report cited a number…

Significant availability-rate increases are affecting a great number of U.S. markets—yet another side effect of the current economic recession in the United States. Manufacturing activity and industrial production declined substantially in the fourth quarter, and weak consumer spending continues to put downward pressure on demand for imports, further reducing the demand for warehousing and distribution space. The fourth quarter also marked a considerable drop in goods exports, which had been propping up demand for industrial space in many markets.The warehouse availability rate for CBRE Torto Wheaton Research’s Sum of Markets increased 70 basis points to 11.8 percent in the fourth…

Although the sector’s returns fell considerably below their historic levels during 2008, industrial properties continued to outperform other major commercial real estate categories, RREEF Research concluded in a recently updated report. However, the sector will have to wait until 2010 for an upswing in growth, given a global economy that has weakened considerably during the past year.RREEF, an affiliate of the Deutsche Bank Group, presented its outlook in a revised version of a February 2008 report on commercial real estate investment. Highlighting changes that have affected the industrial sector over the past year, RREEF analysts updated statistics and commentary in…

Apartments weathered the increase in competition from for-rent houses and condominiums relatively well through most of 2008, However, rising jobs losses will push vacancy up more dramatically in 2009.During the fourth quarter, apartment vacancy rose 40 basis points to 6.6 percent, bringing the year-over-year increase to 90 basis points. Markets hit hardest by housing, such as Phoenix, Tucson, Las Vegas and most Florida markets, registered the greatest increases in vacancy over the past year. Markets that held up best were those in which construction was minimal owing to land constraints or generally weaker economic conditions. San Francisco and New York…

San Francisco’s apartment story has followed the same track for a number of years: Healthy demand exceeds the supply of rental stock. “It’s like other financial hubs, such as Los Angeles and New York, that have the best-paying jobs,” said James Devincenti, senior vice president of investments for Marcus & Millichap Real Estate Investment Services Inc. “San Francisco has a great climate, a great way of life. People want to live here.”Apartment buildings built before 1979 are rent controlled, so rents are mandated to rise at a rate of 60 percent of the consumer price index. That has translated to…

With office vacancy rates continuing to rise, a developer with an expertise in suburban build-to-suit and speculative office projects is likely to have trouble keeping busy. But The Alter Group has continued to develop by expanding its horizons.The company’s most recent redevelopment project is a luxury boutique condominium in Vail, Colo. The company was awarded a $30 million construction loan to add 16 units to the luxury Landmark Condominiums by building into the air rights and to build a new entrance and clock tower.Alter has diversified in recent years, building industrial space, medical offices and even a hotel in Downtown…

The office market lies in the path of a deepening recession, and market fundamentals are softening, though at a moderate pace. The rate of deterioration is more like an orderly retreat than a rout, at least so far.The vacancy rate ended 2008 at 14.8 percent, an increase of 50 basis points in the fourth quarter and 180 basis points for the year. During 2001, when the economy was last in recession—from March to November of that year—vacancy increased by an average of 140 basis points per quarter. Net absorption totaled negative 2.2 million square feet in the fourth quarter and…