April 20, 2016

Wednesday Wrap: April 20

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: 

• Will Roll Out Plans by Lidl, Grocery Rivals Spark Bidding Wars for U.S. Store Sites? by Randyl Drummer, CoStar

Key excerpt:

“Lidl has so far focused its U.S. expansion in Georgia, South Carolina, North Carolina, Virginia, Washington, D.C., Maryland, Delaware, New Jersey and Pennsylvania. The grocer is actively looking for high-traffic signalized intersections in densely populated, established retail locations, preferably pads on a minimum of 3.5 acres it can purchase to accommodate its 36,000-square-foot standalone stores, according to the retailer’s acquisition criteria.”

• Multifamily Investors Seek More Value-Add Deals by Bendix Anderson of National Real Estate Investor

Key excerpt:

“Higher prices on apartment properties have squeezed the yields for investors. Value-add investments offer an opportunity to push those yields higher. That might not matter for buyers simply looking for a safe place to park their money, but high yields are very important to institutional investors like pension funds and insurance companies that must meet their targets to fulfill their responsibilities.”

• Office Tenants Pull Reins on Growth in the First Quarter by Robert Carr of National Real Estate Investor

Key excerpt:

“Leasing volume has been down recently because of stock market volatility and concerns over the economic slowdown in China and low oil prices, notes Julia Georgules, vice president of office research for JLL. Relocations and lease renewals dominated activity in the first quarter, at about 16 million sq. ft., compared to about seven million sq. ft. taken off the market due to expansions and new leases. ‘With the uncertainty, you saw tenants take a wait-and-see attitude to how things are going to shake out this year,’ Georgules says.”

• Data Centers Are a Leading REIT Sector in 2016 by Susan Persin of Trepp

Key excerpt:

“Ideal data center locations are near large population centers, but offer low development, operating, and tax costs, with access to abundant and low-cost energy. Many states offer tax incentives specifically designed for data centers. Markets with the greatest 2015 absorption were northern Virginia, Dallas, Seattle/Portland, San Francisco/Silicon Valley, and Chicago, according to Jones Lang LaSalle.”

• Global Real Estate Boom is Coming to an End, U.K.’s Grosvenor Warns by Art Patnaude of WSJ

Key excerpt:

“Real-estate investment surged after the 2008 financial crisis, pushing values of commercial and residential property to record highs in cities around the world. Amid low interest rates, returns in property looked attractive compared with other asset classes. Stock-market volatility, low oil prices and political uncertainty have dampened demand. High-end housing markets in cities like London and New York have softened in the past year. Commercial property transaction volumes totaled $1.2 trillion in 2015, down 2% from 2014, according to data-provider Real Capital Analytics.”

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