Uncategorized

The average vacancy rate for neighborhood and community shopping centers rose from 8.1 percent in the second quarter to 8.4 percent in the third quarter and for regional/super-regional malls from 6.3 to 6.6 percent, according to data released by Reis Inc. during its third-quarter-2008 briefing. The Webcast did not forecast numbers for regional/super-regional malls, but the average vacancy rate for neighborhood and community centers is projected to hit 9.1 percent at the end of the year, 9.9 percent in 2009 and 10.3 percent in 2010. In 2011, however, the vacancy rate is expected to inch back down to 10.2 percent,…

Even in today’s harsh retail climate, at least one professional practice area is booming. Demand is growing for assistance in shedding unneeded space or negotiating more favorable lease terms. “We anticipate a 50 percent increase (in business) this year, and maybe a 100 percent increase next year,” reported Michael Wiener, president & CEO of Excess Space Retail Services Inc.The largest spike in requests for help from tenants comes from those industries that face the biggest challenges, such as banking, restaurants, and home furnishings. Wiener would not discuss specific examples of work that his firm is handling; however, according to the…

The effects of a weaker employment market on travel are adversely affecting the performance of the national hospitality sector, and primary measures of property health will continue to soften in the months ahead. Year to date, the 62.9 percent occupancy rate was down 200 basis points from the same period a year ago, while the average daily rate has increased 3.7 percent, compared with a 5.7 percent jump last year.Subdued consumer confidence, reinforced by economic uncertainty, is suppressing discretionary spending on such expenditures as travel and has contributed to a 0.6 percent drop in room demand thus far in 2008….

Though RevPAR continues to decline, some in the hotel sector are undaunted and making plans to grow. Hotel developer and operator LodgeWorks L.P. is launching AVIA, an upscale boutique hotel brand, planning to debut the first property in early 2009 in Savannah, Ga. Three more are slated for California’s Napa Valley and Long Beach and The Woodlands mixed-use development outside Houston, all scheduled to open in 2009. LodgeWorks, which also launched the Residence Inn and Summerfield Suites brands before selling them to Marriott and Hyatt, respectively, will own the assets along with its private equity partners.LodgeWorks has signed up some…

Hotel sales volume in the third quarter came in at just $1.9 billion, a hefty year-over-year slide of 80 percent and the property type’s lowest level of quarterly sales since the first quarter of 2004, according to Real Capital Analytics Inc.’s November Capital Trends Quarterly report on the hotel industry. While hotel sales were forecast to touch $9.5 billion through the third quarter and to hit $11.6 billion for all of 2008, volume will probably just barely surpass the total amassed during the first quarter of 2007. Just 93 hotels were sold in the third quarter for price tags that…

Even with the $700 billion relief program and the very low 1 percent federal funds rate—down by 425 basis points in a little over a year—a quick recovery is not likely. The instability in the credit markets could last through most of 2009 for two reasons: Home prices show no signs of hitting bottom, and until that happens, banks will not know the full extent of their losses. Additionally, delinquencies and defaults are just beginning to rise in other loan categories, such as corporate, consumer and commercial real estate loans.As a result, credit will be tight and expensive in 2009,…

The third quarter was a rough road for the office market. Negative net absorption—19 million square feet returned to the market—along with 11.5 million square feet in completions, shot the sector’s vacancy rate from 13.1 percent in the second quarter to 13.7 percent in the third quarter, according to Reis Inc. The vacancy rate, presented during the firm’s third-quarter-2008 briefing, represents an upsurge of 60 basis points, the office market’s heftiest quarter-over-quarter increase since the second quarter of 2002.Just 10 out of 79 primary office markets saw their occupancy rates improve during the third quarter, a considerable drop-off from 45…

The national industrial market experienced a third consecutive weak quarter from July through September. Availability increased 40 basis points to 10.7 percent, and negative absorption totaled 8.2 million square feet with 44.6 million square feet of new supply added. Despite weakening fundamentals, the downturn has not yet reached the depths of previous recessions. Absorption in the past three quarters has entered negative territory but not as deeply as in 2001 or 1991. Nor are we expecting declines to be as steep in the future. Industrial demand is expected to remain weak in the coming quarters, but the lack of lending…

As an overhaul of Detroit’s Big Three automakers appears all but certain, major changes may also be in store for the nation’s industrial market. “This is going to impact real estate all over the country,” predicted Michael McKiernan, Cushman & Wakefield Inc. executive managing director of industrial operations for the Americas. Instead of the $25 billion federal loan they sought from Congress, the carmakers got a deadline from House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid. In a letter sent Friday to the automakers, Pelosi and Reid gave General Motors Corp., Chrysler L.L.C. and Ford Motors Corp. until…

Industrial sales volume in October came in at just $436 million, a massive 71 percent decline from the $1.5 billion worth of sales secured in September and more than 85 percent off from October 2007, according to Real Capital Analytics Inc.’s November Capital Trends Monthly report on the industrial sector. For the year, however, the property type has performed a bit better. Volume through October reached $18.6 billion, 55 percent lower than the $41.6 billion realized from January 2007 to October 2007.“These discrepancies stem from a merchant building business model that has pushed offerings through the roof at a time…