April 13, 2016

Wednesday Wrap: April 13

Each Wednesday, The Wrap presents a compilation of recent noteworthy commercial real estate stories from a variety of publications. Below are links to five stories that caught our eyes in recent days:  

• Bets on San Francisco Office Boom Face Risks by Eliot Brown, WSJ

Key excerpt:

“The tech boom has vaulted the San Francisco office market to become the hottest in the U.S., a favorite of property investors where vacancy has evaporated and rents have soared 137% since 2010 to rival Manhattan levels. But as deals like Stripe’s forthcoming headquarters show, behind this strength is a market packed with big bets on growth—risky wagers that could prove painful should the historically turbulent tech industry retrench.”

• REITs Reverse Course on Investment Strategy, Become Big Net Sellers by Mark Heschmeyer, CoStar

Key excerpt:

“The volume of property sales by REITs in the first quarter is higher than in any of the four quarters from 2015. Also, the volume of purchases is lower by half than any of the individual quarters last year. REITS were net buyers of properties in the first three quarters of last year and the pace of buying and selling was nearly equal in the fourth quarter.”

• U.S. Real Estate Economists Growing More Cautious by William Maher, ULI.

Key excerpt:

“Compared with their analysis six months ago, real estate researchers are predicting slower economic growth, slipping real estate fundamentals, and lower returns from both the public and private markets. As was the case six months ago, no downturn is considered imminent, though global economies and markets remain fragile and volatile.”

• CRE Prices Continue to Drop by NREI Staff

Key excerpt:

“Moody’s/RCA researchers attribute the drops at least partially to tightening availability of debt capital, noting that ‘recent turmoil in the capital markets is now being felt in the commercial property sector, consistent with reports that some acquisition prices have been negotiated lower to reflect higher cost of debt.’”

• Consumers are Seeking Irresistible Experiences at Shopping Malls by Ellen Chang, TheStreet.

Key excerpt:

“Some malls are offering concerts or using the venues to launch a movie or a song. These mall groups are providing entertainment where shoppers have to be connected to their WiFi to receive the release of a new, exclusive song or to stream a special showing of a movie through their own device before it hits the theater or Netflix through their own device.”

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