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.

“Commercial Real Estate Forecast Shows
Lower Vacancies, Higher Rents”
by Carisa Chappell of REIT.com.

Vacancy rates
are trending downward in each of the commercial real estate sectors, according
to the quarterly commercial real estate forecast from the National
Association of Realtors (NAR).

NAR is
projecting positive net absorption and rent growth in 2013 for the office,
industrial, retail and multifamily markets, according to NAR's chief
economist Lawrence Yun. 

“Overall
commercial real estate leasing activity continued to grow in most markets
during the closing months of 2012, which is modestly lowering vacancy rates in
all of the commercial sectors early this year,” Yun told REIT.com.

“Office Supplies Merger Likely to Present
Challenge to Landlords”

by Elaine Misonzhnik of Retail Traffic.

Amid struggling
times for office-supply retailers, OfficeMax and Office Depot announced a plan
last week to merge the two companies. But market observers are speculating the
merger will cause problems for landlords. 

Office Depot
estimates that the merger will result in anywhere from $400 million to $600
million in annual cost synergies by the third year, according to a press
release. A significant portion of those dollars is likely to come from store
closings, according to Morningstar analyst Liang Feng. At least 100 or 200
stores will be closed over the next few years, Feng estimates.

The large
spaces left vacant by the closings could be problematic for landlords, as most
big-box retailers have been downsizing lately, Lew Kornberg of Jones Lang
LaSalle told Misonzhnik.

“Big Real-Estate Firms Are Going to School” by Dawn Wotapka of The Wall Street
Journal.

Some of the
biggest names in real estate — from Lennar Corp. to Brandywine Realty Trust — are
investing in housing for college students, Wotapka reports.

Real-estate firms
are looking to diversify into areas considered less sensitive to economic
downturns, Wotapka notes. During the recession, single-family homes declined,
and apartment landlords were forced to reduce rent, while student-housing
landlords were able to raise rent.

As newcomers come
in to the sector, established players are buying up properties rapidly in order
to remain competitive, Wotapka reports. 

Analysts are
concerned that new investors are unaware of the hidden risks and costs in
student housing, which requires more maintenance and management oversight than typical
apartments do, Wotapka notes.

“Self Storage Gains Cachet as Values Rise” by A.D. Pruitt of The Wall Street Journal.

Self-storage
facilities are the subject of increased investor interest, Pruitt reports.

Just 10 months
ago, cap rates on storage space were near 7 percent, generally several
percentage points higher than cap rates on most other types of commercial real
estate, according to Green Street Advisors.

But recent
activity by Acadia Realty Trust, which sold 14 self-storage properties for
about $300 million and a cap rate of 5.5 percent, showed that self-storage cap
rates are now quite competitive, Pruitt notes.

Although pinched
during the recession, self-storage now has record-high occupancy rates around
90 percent. Landlords have raised rents about 5 percent on existing tenants
over the past couple of years, according to Pruitt.

“Home Prices in 20 U.S. Cities Increase by
Most Since 2006”
by
Michelle Jamrisko of Bloomberg.

The
S&P/Case-Shiller index of property values, which measures home values in 20
U.S. cities, increased 6.8 percent in December on a year-over-year basis, the
biggest such gain since July 2006. Nineteen of 20 cities in the index showed
gains in property values.

Atlanta and
Detroit saw their biggest year-over-year gains since 1991, Jamrisko reports.
Las Vegas and Los Angeles had the biggest month-over-month gains.

Only New York
saw houses losing value, dropping 0.5 percent last year.