August 28, 2013

Wednesday Wrap: Aug. 28, 2013

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

Demand Holding Fast So Far As Apartment Supply Wave Begins to Break”
Randyl Drummer of CoStar.

With the surge of multifamily properties hitting the market,
renters have a wide variety of housing options and amenities to choose from,
meaning apartment investors and developers need to be more innovative in their
strategies, according to Luis Mejia, director of U.S. research in CoStar’s
multifamily group. 

“We’re past the point at which simply picking a market will
lead to a successful strategy,” Mejia said during CoStar’s Midyear 2013
Multifamily Review and Outlook presentation.

Still, “make no mistake — apartment demand is still very
strong and U.S. demographics are clearly in the sector’s favor,” Drummer
writes. “The apartment market absorbed a net 130,000 units in 2012 and [CoStar]
is forecasting another 150,000 net units to be rented this year.”

Earn a Profit Badge”
by Maura Webber Sadovi of The Wall Street Journal.

A Texas Boy Scout council is capitalizing on the uptick of
demand for raw land, selling off parcels of its campsites for profit, Sadovi

The Sam Houston Area Council agreed last month to sell 2,083
acres of land at its Camp Strake for $60 million to Johnson Development Corp. The
city of Conroe also plans to pay the council $416,900 for another 37.9 acres at
the camp, Sadovi reports.

Because of the urban sprawl from nearby Houston, the
campsite no longer provides an outdoor rural experience, Sadovi reports. 

“The urban encroachment has helped us by increasing the
property values,” Sam Houston Area Council President Tom Varnell told The Wall
Street Journal.

Sector Performance Reflects Uptick in Travel”
by Carisa Chappell of

“The hotel sector has been a top performer among REITs so
far in 2013, indicating that the sector is on the road to recovery,” Chappell

As of Aug. 22, hotel REITs had returns of 13.4 percent in
2013, according to the FTSE NAREIT U.S. Real Estate Index. 

On average, publicly traded lodging companies posted
positive results for second quarter operations, but hotel occupancy fell 0.3
percent in June, according to Jim Stevens, analyst with SNL Financial.

Most Expensive City for Rental Income”
by Erika Morphy of

Washington D.C. has the highest average rate of rental
income at $44.30 per square foot, according to the Building Owners and Managers
Association (BOMA) International’s 2013 Experience Exchange Report.

New York follows at $39 per square foot, San Mateo, Calif., at
$36.94 per square foot and San Francisco at $34.49 per square foot. 

Macon, Ga., on the other hand, has the lowest rate at $8.16
per square foot, making it the least expensive city, according to BOMA.

“Total rental income includes rental income from office,
retail and other space, such as storage areas,” Morphy noted.

Panera, Fast-Casual Chains Continue Restaurant Reign”
by Tiffany Hsu of The
Los Angeles Times.

The number of upscale quick-service restaurants grew 7
percent in the year that ended in May, according to a new report from the NPD

Even though the number of customer visits to the restaurant
industry as a whole has plateaued, quick-service eateries saw a 9 percent rise
in visits, Hsu reports.

“Traditional quick-service restaurants have taken notice and
are working to compete with the fast-casual chains’ offerings, especially in
terms of the freshness and quality of food,” Greg Starzynski, director of
product management for NPD’s Foodservice unit, told The Los Angeles Times.

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