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.
• National Office Sales Lead Strongest First Quarter for CRE Investment Since 2007 by Randyl Drummer of CoStar.
“U.S. office property sales volume rose by 39 percent in the first three months of 2015 over the same period last year, pulling nearly even with multifamily for the largest share of sales among the five major commercial property types during a quarter that logged the highest aggregate transaction volume to begin a year since early 2007, before the most recent recession leveled property values.”
• Half of US Property Investors Increase Commercial Acquisitions in 2015 by Michael Gerrity of World Property Journal.
“‘The strength of the economy creating real estate demand, improved property fundamentals and measured supply gains make North America extremely attractive, with investors maintaining a hungry appetite for real estate assets. As was the case in 2014, a majority of investors intend to increase their property acquisitions in 2015. A natural consequence of this appetite for real estate assets is the competitive investment environment,’ said Chris Ludeman, Global President, CBRE Capital Markets.”
• Investors Turn to Big Real-Estate Funds by Peter Grant of the Wall Street Journal.
“But most of the new haul is going to big funds. Overall, funds of more than $1 billion have accounted for 64 percent of all the capital raised so far this year, more than twice the 31 percent they accounted for in 2012, according to [data tracker] Preqin.
Big firms’ success reflects their relatively strong performance during the downturn, when many other funds, particularly those run by big U.S. banks, such as Lehman Brothers Holdings Inc., Morgan Stanley and Goldman Sachs Group Inc., performed poorly.”
• The Big-Box Downsize Effect: Making Sense of Brick-and-Mortar Vacancies by Casey McKeon for Shopping Center Business.
“The retail real estate sector continues to evolve as a variety of sales and lifestyle dynamics force big retailers to evaluate their brick-and-mortar footprint. With many reducing their number of physical stores, property owners and investors are faced with a multitude of challenges as they deal with the big vacancies left behind. Even so, many of the affected retail centers offer significant upside potential in the wake of a trend that could reap significant damage to this commercial real estate sector down the line.”
• As Agencies Change Focus, LTVs Rise by Les Shaver of Multifamily Executive.
“The average LTV on apartment loans climbed to 69 percent in 2014, after hitting 67 percent the year before. The big driver of that movement was agency lending, which went from 65 percent in 2013 to 69 percent in 2014.
RCA also may have found some justification for this movement in LTV. ‘The average asset quality may well have improved for these lenders with occupancy rates, average sale price, and average loan size all improving,’ it said in [its] report.”