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.
• Real Estate Recovery in U.S. Uneven as Housing Starts Fall by Victoria Stilwell of Bloomberg.
“Building permits also fell last month, indicating a surge in construction is probably not in the cards for the immediate future. One positive aspect is that the recent turmoil in financial markets has pushed down interest rates, which combined with a strengthening job market, means homebuying will be within reach for more Americans next year.”
• BMO Analyst Says Diminishing Interest Rate Concerns Boosted REITs in 2014 by Sarah Borchersen-Keto of REIT.com.
“According to [Paul] Adornato, the big story for REITs during 2014 was their ‘tremendous performance’ compared with the overall market. Although concerns about interest rate increases did impact REITs earlier in the year, REITs ‘sailed away’ once investors determined that those increases were not imminent, he said.”
• Global Capital to Continue to Flow into Real Estate in 2015 by Michael Gerrity of World Property Journal.
“[Jacques] Gordon also noted that markets around the world are at very different stages in terms of market fundamentals and capital markets, and hence future performance. Thus, it makes sense to have an investment program that takes advantage of real estate cycles. Examples of cycle-sensitive strategies include: Harvesting gains and selling properties in frothy capital markets, taking advantage of higher levels of leasing/rental growth in growth markets, and focusing on locations/sectors that are positioned to qualify as mainstream "core" assets in a few years.”
• Successful Retail Properties Boost the Bottom Line with an Experiential Approach by Julie Brinkerhoff-Jacobs for Shopping Center Business.
“The retail experience is changing. The once passive retail formula focused on ‘getting in and getting out’ as quickly as possible has now evolved into an all-immersive experience. Shoppers are now looking for retail centers where they can connect with their community and share experiences with family and friends. The question is, how do retail centers leverage this shift in retail experience to impact their bottom line?”
• How Best to Retrofit Housing for Earthquakes? Rezone and Densify by Justin Gerdes for Urban Land Magazine.
“Current zoning does not generally permit the addition of new units in these buildings. For landlords, this zoning change would unlock thousands of dollars in new rental revenues—more than enough to pay back the substantial costs of shoring up the buildings. And for tenants, the change would add to the city’s housing stock, relieving some of the upward pressure on rents.”