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.
• The Story Continues: Sales Rise and Cap Rates Fall in 1Q by Les Shaver of Multifamily Executive.
“Entity-level and portfolio volume grew 117 percent, but that was driven by the Gables Residential deal. Portfolio deals, alone, grew 57 percent to $6.2 billion. As this was occurring, apartment prices rose 10 percent on the year and are now 21 percent ahead of the peak prices seen in 2007, according to Moody’s/RCA CPPI. That has been a cause for concern in some circles.”
• By The Numbers: U.S. Office Construction Picking Up Momentum by Randyl Drummer of CoStar.
“About 108 million square feet was under construction at the end of first-quarter 2015, up 17 percent from 92 million square feet in the same period a year ago, according to CoStar data. The level of national office construction has risen very slowly since hitting its long-term historical trough of less than 50 million square feet in late 2010, producing quarterly supply growth that was the moral equivalent of zero when factoring in demolitions of obsolete office space and other loss of inventory.”
• Foreign Real Estate Investors Look for U.S. Partners by Beth Mattson-Teig of National Real Estate Investor.
“Foreign capital is an attractive target for investment groups across the board, from publicly traded REITs and private equity funds to groups offering a variety of ownership structures such as syndications, joint ventures and limited partnerships. ‘Most of the private equity firms and larger real estate fund sponsors, as they have increased their fund raising activity over the last 18 months or so, have clearly included foreign investors in their targets for raising capital,’ says [Bob] O’Brien.”
• Economy Watch: Better Walkability = Higher Valuation? by Dees Stribling of Multi-Housing News.
“According to RCA, CBD commercial property values, which score consistently high Walk Scores, have risen 125 percent over the last decade, while values for suburban properties that are nevertheless very walkable were up 43 percent. In ‘somewhat walkable’ or ‘car-dependent’ suburbs, property values are only up by about 22 percent. The logical projection from that—though the indicies aren’t in the business of predicting—is that as the nation’s demographics change and residents want to be in walkable locations, high Walk Scores are going to mean higher prices for properties. The stronger price appreciation trends associated with highly walkable properties reflect both a premium in rents that residents pay for such locations, but also the increasing demand from investors who recognize the long-term value of walkability and mixed-use developments.”
• Retail's New Reality: Invisible Shopping Centers and Virtual Assistants by Lance Eliot for CNBC.
“Some of the largest retailers have been looking at augmented reality (AR) for years as one of those technology advancements with huge potential to reach shoppers who are constantly on their mobile devices, aiming to connect with shoppers while either in the store, or even while outside the store to bring them into the store. AR can touch everything from shopping aisles to product displays to even fully immersive stores, creating a series of virtual assets that retailers are experimenting with in a big way.”