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:
RETAIL OUTLOOK: Shopping Center Owners Brace for More Downsizing as Space Rationalization Still in Early Stages, By Mark Heschmeyer, CoStar
Key Excerpt:
“Having recently analyzed the oversupply of retail stores and the growing market share of e-commerce sales, Costar’s Portfolio Strategy group is making a bold call going into the new year: Retailers need to rationalize nearly 1 billion square feet of U.S. store space in order to reverse the trend in declining sales per square foot. This could take the form of store closures, converting unused retail space to other uses, or rent roll downs.”
Apartment Building Owners Face Higher Rates on Loans, By Bendix Anderson, NREIOnline.com
Key Excerpt:
“Long-term interest rates rose by well over 50 basis points in the last months of 2016, as the yield on the benchmark U.S. Treasury bonds took off after the victory of Donald Trump in the presidential election. That will make it tougher for borrowers to make deals work. Meanwhile, lenders have not shifted the terms they offer or bent their underwriting requirements to help close deals.”
273-unit Apartment Development Planned at Lenox Park in Brookhaven, By David Allison, Atlanta Business Chronicle
Key Excerpt:
“Atlanta-based The Worthing Companies is proposing to develop what it calls Heights at Lenox Park on 5.3 acres on Lenox Park Boulevard and Lake Boulevard on a vacant development parcel now zoned for two six- and eight-story office buildings, the developer says in plans filed with the City of Brookhaven.”
Reis: Rent Growth, New Completions Slow, but Demand Should Stay Strong, By Mary Salmonsen, Mutlifamily Executive
Key Excerpt:
“According to data presented in Reis’ Apartment Sector Preliminary Trends report, 13 metros recorded a decline in rent growth during the fourth quarter of 2016. Boston led the drop, with rents falling by 1.7 percent, while Washington, D.C.; San Jose, Calif.; and Austin, Texas, experienced rent declines of 0.9 percent each, followed by other tech markets, including Oakland, Calif., and San Francisco. Palm Beach, Fla., saw the highest rent growth in the last quarter, at 1.9 percent, followed by Salt Lake City and Sacramento, Calif., each at 1.6 percent.”
CAPITAL MARKETS OUTLOOK: Borrowers Face Rising Debt Costs, Peaking Property Cycles, By Mark Heschmeyer, CoStar
Key Excerpt:
“The cost of debt was already starting a sharp rise following the presidential elections in November and an increase in the federal funds borrowing rate in December. The Federal Reserve, and bankers too, are expecting additional interest rate increases throughout the new year.”