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.
Performance May Have REITs Waiting to Go Public” by Carisa Chappell of REIT.com.
The poor performance of REITs’ initial public offerings (IPOs)
over the last three years may be keeping other real estate companies from going
public, the author reports.
“Typically, you expect a company when they become public to
have growth plans and buy-in from the investment market,” Keven Lindermann,
managing director with SNL Financial, told Chappell. “You would expect a
stronger performance that that if a company feels like there’s enough investor
interest to successfully execute an IPO.”
However, Lindermann also noted that REITs that investors are
expecting to go public soon could be successful and motivate a wave of companies
to join the market. “There are a number of companies that are ready to tap the
public markets when the market is ready for them,” he added.
Houston and Los Angeles Will Experience Rent Increases for Class-A Space in
2013” from Retail Traffic.
U.S. cities expected to show the greatest rental hikes for Class-A
space next year include Boston, Dallas, Houston, Los Angeles and San Francisco,
according to a recent report by Cushman & Wakefield and the International
Council of Shopping Centers (ICSC).
Rents in Dallas, which are currently at $125 per square foot,
are expected to rise to $145 per square foot next year, and those in Houston,
currently at $135 per square foot, should jump to $150 per square foot, the
Meanwhile, rents in Washington D.C., the New York tri-state
region, Chicago and Las Vegas are expected to remain flat.
Economic Downturn Cut Architecture Firm Revenue by 40 Percent” from
Citybizlist – Washington D.C.
Architecture firms have seen revenue drop by 40 percent and
have had to cut employees by a third since the start of the recession in 2008,
according to the new 2012 AIA Firm Survey.
The steep decline in construction spending has resulted in
architecture firms’ gross revenue declining from $44 billion in 2008 to $26
billion in 2011. The subsequent employee layoffs have also shifted the staff
makeup of many companies, creating large losses in technical and support staff.
Place foreclosure: $39 million” by Douglas Sams of the Atlanta Business
An affiliate of mortgage servicer C-III Asset Management
foreclosed in August on Gwinnett Place Mall, located in the Atlanta suburb of
The mall was foreclosed on for $39 million, a huge cut from
the $115 million value of the loan, according to Trepp LLC. Gwinnett Place has
been performing poorly for years due to newer malls built nearby that competed
for the same stores.
The mall is just one example of the great number of
struggling shopping centers in suburban Atlanta, Sams notes.
Restaurant Chains Flock to Malls” by Julie Jargon and Kris Hudson of The
Wall Street Journal.
One good sign for malls: vacancies left by retail store
closings during the recession are being filled by restaurant chains doing well
despite slow overall economic growth.
Examples include Olive Gardens moving into closed
supermarkets, Circuit City stores and motels; LongHorn Steakhouses taking over
former Blockbuster and Borders Group stores; Buffalo Wild Wings converting old
Sears sites; and Chipotle using former Starbucks stores closed during 2008 and
2009, Jargon and Hudson write.
As online shopping continues to gain popularity, landlords
like adding restaurants because of the foot traffic they attract, the authors
note. However, concerns like parking and retrofitting retail spaces for food
service still pose challenges.