Each Wednesday, The Wrap
presents a compilation of recent noteworthy commercial real estate stories from
a variety of publications. Below are a few stories that caught our eyes in
recent days.
• “Demand
for Office Space Still Sluggish” by Eliot Brown of The Wall Street Journal.
Demand for office space remained slow in the fourth quarter,
as employers are still skittish about adding jobs, Brown reports.
The vacancy rate only dropped 0.1 percentage point to 17.1
percent in the fourth quarter, according to research firm Reis. In a survey of
79 metropolitan areas, Reis found the average asking rent rose 0.8 percent to
$28.46 per square foot.
Although the office market has been expanding since the
start of 2011, the rate of improvement is a lot slower than is usually seen
during a growing economy, Brown notes.
Even though the national numbers remain slow, the office
market has been moderate to strong in some regions, especially technology and
energy hubs such as San Francisco and Houston, Brown writes.
For example, rents in San Francisco rose 6.6 percent in
2012, according to Reis. Nationally, asking rents rose 1.8 percent for the
year.
• “REITs
Outperform in 2012, Look for Strong 2013” by Carisa Chappell of REIT.com.
REITs outperformed the broader U.S. stock market in 2012, as
they have done every year since 2008, Chappell reports.
Industry analysts say they expect REITs to perform similarly
in 2013. REITs should benefit from job growth, economic growth, higher
occupancy rates and rental growth in 2013, predicted Brad Case, senior vice
president of research and industry information for the National Association of
Real Estate Investment Trusts.
One area of concern for REITs is interest rates, which may
rise if the pace of the economy picks up in 2013, Paula Poskon, senior equity
research analyst at Robert W. Baird & Co., told Chappell.
• “GM
Pays $18.5 million for Roswell Technology Center” by Douglas Sams of the
Atlanta Business Chronicle.
General Motors Co. (GM) has purchased an almost
230,000-square-foot building in suburban Atlanta for its new technology center.
GM paid $18.5 million for the Roswell, Ga., building, which
was formerly used by United Parcel Service Inc., Sams reports.
GM will convert the building into a software development
center that’s expected to bring 1,000 new jobs to Atlanta, according to Sams.
The building is located in an opportunity zone, meaning GM is eligible for tax
credits for creating new jobs there.
Last year, the company said it is planning to build a total
of four new technology centers across the United States. GM plans to hire a
total of 10,000 workers for the new centers.
• “Biotech
Players Lead a Boom in Cambridge” by Karen Weintraub of The New York Times.
The biotechnology and pharmaceutical industries are the
major drivers behind the current commercial real estate boom in Cambridge,
Mass., Weintraub reports.
The Cambridge area has eight different sites currently under
construction and roughly 2 million square feet of commercial space is being
built, renovated or is under review in the city, according to Weintraub.
The nearby locations of the Massachusetts Institute of
Technology (MIT) and Harvard University are helping drive pharmaceutical
development in the city, Weintraub notes. Pharmaceutical companies have
traditionally preferred the suburbs but are now looking to be closer to major
research universities such MIT and Harvard.