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.
• Battle for Poor Shoppers Fuels Dollar-Store Deal by Paul Ziobro and Shelly Banjo of The Wall Street Journal.
“The chains [Dollar Tree and Family Dollar Stores] thrived during the recession as the number of working Americans living in poverty increased by nearly 40%, according to the U.S. Bureau of Labor Statistics.
The stores appealed to cash-strapped shoppers with bargain-basement prices and locations that were closer to their homes than many Wal-Mart supercenters. The smaller package sizes of everyday items like laundry detergent and cereal fit into the budgets of consumers living paycheck to paycheck.
Total expenditures by U.S. households that earned less than $30,000 has been flat at an annual total of just over $1 trillion since 2008, according to the latest data from the U.S. Bureau of Labor Statistics.”
• Brick-and-Mortar Stores to Remain Cornerstone of Retail, Study Shows by Sarah Borchersen-Keto of REIT.com.
“The study found that most shopping experiences are processes that involve multiple steps, such as researching, purchasing, and possibly returning a product. Consumer preferences vary according to the different stages in the shopping process, A.T. Kearney noted, but there is a preference for brick-and-mortar stores at each step.
According to the study, two-thirds of customers purchasing online used a physical store before or after the transaction. The store makes a significant contribution to generating the sale, even though the transaction is eventually registered online, the A.T. Kearney study noted.”
• Spec Development Returning In Hottest U.S. Office Markets by Randyl Drummer of CoStar Group.
“Spec deals are trending upward across the country as rising rents and receding supply justify new projects. Year-over-year office rent growth held steady at 3.7 percent in the second quarter, matching the first quarter for the largest increase of the recovery so far, according to data analyzed by CoStar Portfolio Strategy.”
• Real Estate and Crowdfunding: A New Path For Investors by Brian O’Connell of Investopedia.
“Can two disparate investment markets — one old and one new — get along without driving each other crazy?
That’s the key question for crowdfunding and the real estate market. It’s a question being answered in positive ways in 2014, as the two ‘odd couples’ appear to be pairing up quite nicely and giving investors a new way to leverage profits from the burgeoning U.S. real estate market.
The real estate crowdfunding site iFunding estimates the size of the combined market at $11 trillion.”
• Insider’s Perspective: Banks Eager to Make CRE Loans, Still Unloading Distressed Assets by Keat Foong of Commercial Property Executive.
“Banks today can also obtain a good arbitrage by selling their loans, as their costs are low, comments [Richard Walter of Promontory Interfinancial Network LLC]. Indeed, he says, banks today are the lowest-cost provider of commercial property financing besides the agencies, After all, they are paying less than 1 percent on bank deposits. By contrast, the cost of funds for mortgage REITs, private REITs or hedge funds are relatively higher, and consequently these entities may require higher yields in their loan transactions compared to banks.”