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.
• Pendulum Swinging Away From Open Office? by Brian J. Rogal of GlobeSt.
“But although the needs and wants of tech firms have also helped drive the trend toward more open offices, the speakers were ambivalent about the trend’s staying power. Many employers have started to notice that workers tend to leave open areas and retreat to more private offices to get projects done. ‘The pendulum may be tilting away’ from the open office concept, [Roger] Heerema said. Still, ‘I don’t know if we’re quite there yet.’ He advises companies to retain as much flexibility in office design as they can.”
• Lots of Renters Balance Lots of New Apartments by Bendix Anderson of National Real Estate Investor.
“Developers finished 48,494 new apartments in the fourth quarter, adding up to a total of 161,518 new apartments in 2014, according to a tally of the top 79 apartment markets kept by Reis. That’s the most apartments completed in any year since 2001. It’s also high above the historical average of about 130,000 apartments completed a year from 1999 to 2007 in the 79 markets tracked by Reis. Reis had expected developers to finish even more new apartments, though a few projects were delayed and will now open in 2015.”
• These Retailers Getting 'Most Bang for the Buck' by Krystina Gustafson of CNBC.
“According to [Randal] Konik's analysis, off-price retailers Ross Stores and TJX lead the pack, each bringing in sales per square foot more than 20 times greater than what they're paying in rent per square foot. Rounding out the top five are Ulta, Tiffany and Urban Outfitters.
‘It's really a function of productivity,’ said Paul Freddo, senior executive vice president of leasing and development for DDR, about TJX and Ross.”
• Economy Watch: The Benefits of Low Inflation by Dees Stribling of Commercial Property Executive.
“But does a period of low inflation help keep rent increases down as well? Not as much, since rents tend to be more a function of tenant demand vs. landlord supply than an abstraction like the inflation rate. The leading example of that in our time is the apartment market. Demand has outpaced supply for some years now, and the result is higher rents, which are reflected in the BLS’ shelter index, which has [been] rising faster than the CPI as a whole in recent years.”
• Energy Benchmarking Can Spot Money Pitfalls by Daniel Teague of Multifamily Executive.
“Multifamily buildings should also be benchmarked by height because of the ‘stack effect’— a fancy way of describing the old science-class axiom that heat rises. In taller buildings, this fact can dramatically affect energy use.
In winter, a building’s heat escapes through the roof, and cold air is pulled in through basement and first-floor doors and windows. First-floor tenants may try to stay warm by cranking the thermostat while those on the middle and top floors open their windows for fresh-air relief. With hot air at the top and cold air at the bottom, this can create an inefficiency merry-go-round.”