April 10, 2013

The Wednesday Wrap: April 10, 2013

Each Wednesday, The Wrap
presents a compilation of recent noteworthy commercial real estate stories from
a variety of publications. Below are five stories that caught our eyes in
recent days.

Coffee to Close 80 Underperforming Stores”
by The Associated Press (AP).

Caribou Coffee announced Monday it will close 80 underperforming
stores and convert another 88 sites to Peet’s Coffee & Tea stores, the AP

The Minneapolis-based coffee company did not say which
stores it would close, but the conversions will occur in the District
of Columbia, Georgia, Illinois, Maryland, Michigan,
Ohio, Pennsylvania, Virginia and Wisconsin over the next 12 to 18 months, according to the AP.

German investment firm Joh. A Benckiser Group GmbH holds a
majority stake in both Caribou and Peet’s, the AP reports.  

• “Uncertainty,
Cutbacks Create Tenant’s Market in D.C.”
by Robert Carr of National Real
Estate Investor. 

Government cutbacks have cooled office leasing in
Washington, and tenants now have the upper hand in the city, Carr reports.

The slowdown is a direct result of uncertainty over the
federal budget, John Germano with CBRE told National Real Estate Investor.

The Office of Management and Budget has frozen its leasing activity
and is requiring other federal tenants to reduce occupancy over the next three
years, Carr reports.

Even so, buyers still outnumber sellers of office buildings
in D.C., and development is showing up in choice markets, Carr notes.

• “J.C.
Penney’s Post-Johnson Options Seen to Include Sale”
by Matt Townsend and
Jeff Green of Bloomberg.

After hiring Ron Johnson from Apple as its new CEO only a
short time ago, J.C. Penney Co. has voted to replace him with his predecessor,
Myron Ullman, Townsend and Green report.

Ullman must now decide whether to continue with Johnson’s
strategy to turn the chain into a collection of boutiques or return to the more
traditional department-store model. The chain was so damaged under Johnson that
Ullman will struggle to turn it around, the writers note. 

Because J.C. Penney has the industry’s highest ratio of net
debt to market value, a traditional leveraged buyout is unlikely, according to

• “Businesses
Stay Cautious About Renting Office Space”
by Eliot Brown of The Wall Street

Occupied office space grew by just 0.12 percent in the United
States in the first quarter, reflecting continued caution about the economic
recovery, Brown reports.

Asking rents increased 0.7 percent to $28.66 a square foot during
the first three months of 2013, while the office vacancy rate fell from 17.1
percent to 17 percent, a mark that is still significantly higher than the 12.5
percent recorded at the office market’s 2007 peak, Brown reports.

Cities with strong technology and energy sectors saw the
strongest office markets in the first quarter. These include Dallas, Houston, New
York, San Francisco and San Jose, Calif.

“More Private Real Estate to End Up in Public Hands”
from REIT.com.

this clip
, Matt Bechard of REIT.com sits down with Sandy Presant, chairman
of the global real estate fund practice group at the Greenberg Traurig
law firm, to discuss the chances of large, privately held portfolios of real
estate entering the public markets.

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