November 28, 2012

The Wednesday Wrap: Nov. 28, 2012

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.

Residential, AvalonBay to Acquire Archstone for $6.5 Billion”
by Matt
Valley of REBusiness.

Equity Residential and AvalonBay Communities Inc. have
entered into an agreement with Lehman Brothers Holdings Inc. to acquire
Archstone Enterprise LP for roughly $6.5 billion in cash and stock, Valley

Equity Residential will acquire approximately 60 percent of
the assets, and AvalonBay will acquire the remaining 40 percent. Equity Residential
will get 78 properties located across the United States. AvalonBay will receive
66 apartment communities, nearly half of which are located in California.

Before the deal was announced, it was thought that Lehman
Brothers Holdings would take Archstone public, Valley writes. However, Lehman
is liquidating U.S. assets and ultimately decided on the quick sale.

a Rise in Homeownership Rates Hurt the Multifamily Sector?”
by Bendix
Anderson for National Real Estate Investor.

The bargain deals available in the for-sale housing market
could soon entice renters faced with the increasingly higher costs of renting.
However, as of now, many renters are too uncertain about the broader economy to
make decisions on buying a home, Brady Titcomb of Jones Lang LaSalle told

Young people who bought their first home during the housing
boom were often hurt the worst when the market fell, Titcomb said, noting that
Generation X homeowners suffered a 59 percent drop in net worth in the crash.

The median home price inched up in October to $178,700,
according to the National Association of Home Builders, and the interest rate
on the average mortgage fell to an extremely low 3.34 percent, according to
Freddie Mac.

However, enticing home prices don’t make up for the fact
that inventory is low, and it can be hard for would-be homeowners to qualify
for a mortgage, Lawrence Yun of the National Association of Realtors told

Coffee Wars Continue”
by Jennifer V. Hughes for Retail Traffic.

Starbucks, Dunkin’ Brands and McDonald’s continue to fight
for control of the U.S. coffee market, and the net-lease assets and small strip
centers that often house the stores are attracting big interest from
real-estate investors, Hughes reports.

The latest financial statements show increases in revenue
for Dunkin’ Brands and Starbucks, but McDonald’s saw a drop in third-quarter
profits as the economy remains fairly weak, according to Hughes. However, all
three companies are aggressively pushing to expand. Starbucks is looking to create
more drive-through locations for its Seattle’s Best Coffee business and to add
more Starbucks sites, while Dunkin’ plans to double its stores in the next 20
years, Hughes adds.

Regional chains like Gloria Jean’s and Peet’s Coffee and Tea
are fighting an uphill battle to compete with the industry heavyweights, as developers
will want to go with one of the well-known brands, Bill Rose of Marcus &
Millichap told Hughes.

Seniors Housing Keeps Going Green”
by Robert Carr of National Real Estate

Developers are finding it easier than ever to incorporate
sustainability into affordable seniors housing projects, Carr reports. Costs
have been cut as more eco-friendly suppliers have emerged, and the federal
government is pushing for more sustainable buildings.

Affordable housing, including senior housing, is usually
financed by public funds or nonprofit institutions, and those funding providers
are more likely to support sustainable projects, Colin Edelstein of NorSouth
Constructs told Carr. Some states even require green features before rewarding
tax credits to affordable housing.

Because the rents are relatively low, developers of
affordable seniors housing often look for moderately priced environmental features
– such as high-efficiency heating and cooling systems – instead of costlier
items like solar panels, according to Laura Weyrauch of Pathway Senior Living

Industrial Sector Climbing Back Up”
by Carisa Chappell of

this clip
, Hamid Moghadam, chairman and co-CEO of Prologis, sits down
during NAREIT’s REITWorld 2012 to discuss the drivers in the industrial sector,
its strength and the impact of the supply chain on the sector.

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