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
Industry Takes Stock of Hurricane Sandy Damage” by Mark Heschmeyer of
Commercial real estate firms have begun to release estimates
of the property damage caused by Hurricane Sandy in the Mid-Atlantic and
Northeast last week.
Insurance risk modeling firm Eqecat Inc. estimates the initial
insured loss between $10 billion and $20 billion with an additional $30 billion
to $50 billion in total economic damage.
Because the storm was so widespread, this number could
change as experts adjust their estimates, Heschmeyer notes.
There also will be significant business interruption losses
because of the power outages and flooding that have plagued the areas hit by
Many commercial real estate firms have had to close business
for a number of days, and some – like Ambac Financial – were forced to
relocate; Ambac has moved its headquarters from New York City to Kingston, N.Y.
Market Fundamentals’ Improvement Slows” by Carisa Chappell of REIT.com.
Data released at the end of October shows apartment market
conditions have improved for the seventh consecutive quarter, but the pace of
improvement has slowed, according to the National Multi Housing Council (NMHC).
High occupancies and increased rental rates have come at a
more moderate pace, according to NMHC’s quarterly survey of executives with
apartment-related firms. Only 25 percent of respondents reported tighter rental
markets, versus 55 percent in the previous quarter, and 14 percent reported a
Traditional Grocers in Trouble? Three Innovative Chains Say Yes” by Susan
Piperato of National Real Estate Investor.
Grocers must be fiercely competitive in today’s market to
survive, according to executives from Trader Joe’s, Aldi and Walgreens who were
part of a panel discussion at last week’s National Net Lease Investment
The trend of traditional grocers acting as anchor stores for
shopping centers is changing as companies ranging from drugstores to gas
stations have begun to offer groceries, the executives noted.
The economy has forced consumers to be more discerning and
to shop around for the best price, which has caused havoc for traditional
grocery stores, said Michael F. Mallon of Mallon and Associates Inc.
Trader Joe’s continues to open an average of 25 to 30 new
stores per year, focusing on highly concentrated urban areas with educated
Aldi has seen its business model change; the company used to
take corner locations in low-income and moderate-income areas, but now it is
looking for freestanding locations in central areas, Mallon said.
Walgreens has joined a number of non-traditional grocers in
offering grocery items and continues to build more stores at any size,
according to its vice president of real estate, Michael Krasucki.
Housing Firms Aim Upscale” by Dawn Wotapka of The Wall Street Journal.
Public companies are trying to break into the
student-housing market by offering students tired of dorm life private rooms
and bathrooms as well as plenty of amenities, Wotapka says.
The industry is seeing growth in cottage-style housing — upscale
houses with bedrooms dotted around gourmet kitchens, according to Wotapka.
Developers increasingly are interested in student housing because
more than 3 million high-school students are expected to graduate annually
until 2018-2019, and universities experiencing budget cuts aren’t supplying
enough beds to keep up with the influx of students, Wotapka writes.
“Uncertainty Impacts Investors in October” from REIT.com.
In this clip, Brad Case, senior vice president of
research and industry information at NAREIT, talks about the impact of
Hurricane Sandy on REITs. He also explains how uncertainty caused by the presidential
election played a big part in the “soft month” experienced by REITs in October.