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.
• “Hotel
Buyers To Play Catch Up with Rest of CRE Investment Market in 2013” by Mark
Heschmeyer of CoStar.
The hotel segment was the only sector of commercial real
estate that did not see a year-over-year increase in sales transactions in
2012, according to new CoStar research.
According to CoStar, the hospitality sector experienced a 16
percent decline in sales from 2011, from $21.7 million to $18.1 billion.
However, it seems buyer groups are showing a renewed
interest in acquiring lodging assets, according to Jones Lang LaSalle (JLL). “Inadvertent
hotel owners, like banks and receivers, will continue to drive a significant
share of hotel product to market,” Mark Wynne-Smith of JLL’s Hotels &
Hospitality Group told Heschmeyer.
• “CoStar
Sounds Early Warning On Multifamily Development” by Bendix Anderson for
National Real Estate Investor.
Real estate analysts at the CoStar Group say the current
rate of multifamily development could eventually lead to an oversaturation of
the market, with too much new development coming on line at the same time and
driving up vacancy rates.
Apartments currently under construction make up 1.4 percent
of the total apartment inventory in the top 54 markets, a much higher
percentage than is found in other property segments, according to CoStar
research.
It’s uncertain whether apartment construction is “oddly high”
or whether the volume of construction in other sectors is ”oddly low,” Anderson
notes. With fears that the next wave of development could be too much, CoStar
is recommending that developers make sure not to overbuild in certain markets.
• “Amazon
Drives Seattle Office Market Surge” by Kristina Shevory of The New York
Times
Amazon’s recent activity in the Seattle office market has triggered
rent increases and a drop in vacancies in the city, Shevory reports.
Last year, Amazon bought 1.8 million square feet in Seattle
for its headquarters, the biggest office purchase nationwide in 2012. The
online retailer already leases or owns 2.7 million square feet in Seattle, and
plans to more than double that number with the construction of three of its own
office towers this year, Shevory reports.
Amazon’s expansion has led to increased activity in
Seattle’s office market, with technology companies leading the way; the vacancy
rate was 10.7 percent at the end of 2012, down from 12.4 percent in fourth-quarter
2011, according to commercial real estate brokerage Kidder Matthews.
“We’re seeing a lot of companies that want to be closer to
Amazon and that synergy,” Jesse Ottele of CBRE in Seattle told Shevory.
• “Walmart Adds Non-Walmart Retail Space to Midtown Miami Project” by Oscar Pedro
Musibay of South Florida Business Journal.
Walmart will lease space in its new 180,000-square-foot
store in Midtown Miami to other retailers, Musibay reports
Walmart will use 16,000 square feet of space on one side of
the building to incorporate small restaurants and shops. The national retailer
is hoping the move will address opposition form local business people concerned
that the big-box store will hurt small businesses in the area, according to
Musibay.
• “DC
Hotels Post Inaugural Bump” by Erika Morphy of Globe St.
Washington D.C.’s hotel industry got a bump this week, as an
estimated 600,000 to 800,000 visitors flooded the city for Monday’s
presidential inauguration.
“There is no doubt that the DC market outperforms in
presidential inauguration years, and we expect that 2013 will be no different,
although not as robust as President Obama’s first inauguration,” Robert Webster
of Jones Lang LaSalle’s Hotels & Hospitality Group told Morphy.
Webster said that the Washington D.C. hotel market
experiences RevPAR growth premiums that are 4.7 percentage points higher that
the national average on inauguration years.