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.
• Office Recovery Hits Halfway Point as Demand for Space Spreads Across More U.S. Markets by Randyl Drummer of CoStar Group.
“Driven by the technology boom and the rapidly accelerating housing recovery, suburban office markets have accounted for the lion share of leasing activity, generating 83 percent of total U.S. net absorption over the last year.
And more markets are joining the recovery, particularly in the Midwest, with CBD markets such as Cleveland, Detroit, and St. Louis, and suburban markets such as Kansas City, now seeing rising demand. But the Houston suburban market remains the biggest story of all, logging a staggering 7.7 million square feet of suburban absorption over the last year.”
• Going for the Gold by Keat Foong of Multi-Housing News.
“Nevertheless, for sellers who are exploring their options, there are various advantages of selling to institutions. Certainty of closing is one of the top-cited benefits. Some say another advantage of selling to these organizations is their strong net worth and ability to pay top dollar—or to bid higher prices to separate themselves from other buyers. Non-institutional, smaller players have ‘sharper pencils,’ and may be strict with underwriting, says Marv Pearlstein, partner, Real Estate & Land Use, at the law firm of Manatt, Phelps & Phillips, LLP. On the other hand, institutions are not any less exacting in underwriting—‘they are very thorough and ask good questions,’ says Pearlstein. ‘If there are issues big or small, they are going to find them.’”
• Turning to the Crowd for Capital by Anna Spiewak of Commercial Property Executive.
“There’s a new buzzword in real estate, and the word is: crowdfunding. While its freshness on the market naturally still raises a question mark in several developers’ and investors’ minds, it is most certainly making waves among the real estate industry and in the media, as several developers, real estate crowdfunding firms and average investors are already making money off the concept.”
• Urban Tales: Why Retail Development is Shifting Away from the 'Burbs by Judd Bobilin for Shopping Center Business.
“Downtowns have become entertainment districts, with an influx of boutique stores, restaurants, bars, cafes, clubs and other venues catering to urban dwellers and suburbanites seeking something new and exciting. Time-constrained lifestyles and boredom with the homogeneity of most malls, as well as the rise of online shopping, have meant a slow but steady decline in the number of shoppers and the length of stays at malls. With an increasing number of young millennials and older baby boomers rejecting the traditional suburban lifestyle in favor of urban living and shorter commutes, it’s time to rethink the old development patterns.”
• Start Me Up: Young Tech Companies on Real Estate by Gus Delaporte of Commercial Observer.
“For purely economic reasons, the real estate options available to early-stage companies are limited. But with Series A funding comes greater flexibility to grow staff and find new offices. Start-up founders told Commercial Observer last week that internal conversations about real estate have directly resulted from recent Series A funding.
It’s clear that start-ups think about space differently. It’s not simply about bricks and mortar.”