Each
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.
• “Detroit
Bankruptcy Underscores Rift Between City, Suburbs” by Mark Niquette of
Bloomberg.
Detroit’s record $18 billion bankruptcy “raises questions
about … whether urban areas with hollow cores can thrive,” Niquette reports.
There’s a growing divide between Detroit’s city core, where
per-capita income is $15,261, and surrounding suburbs that are much more
affluent, Niquette reports.
Michigan’s prosperity no longer depends on its largest city,
argues L. Brooks Patterson, county executive for Oakland County, which boarders
Detroit.
Detroit was the fourth-largest city in the United States by
1950, but since then, 1 million people have left for the suburbs. Oakland County’s
population has tripled in that time, Niquette notes.
Others — such as Matt Cullen, president and chief executive
officer of Rock Ventures — argue that a failed Detroit will drag down surrounding
communities.
• “Crowdfunding
Coming to Atlanta Commercial Real Estate” by Douglas Sams of the Atlanta
Business Chronicle.
Fundrise LLC, a Washington, D.C., crowdfunding company that
sells ownership in buildings to individual investors, is bringing its investment
model to Atlanta, Sams reports.
The company is seeking to partner with local developers,
including intown developer Urban Realty Partners. It’s focusing on projects in
Atlanta’s “up-and-coming areas,” including the Old Fourth Ward, Inman Park,
West Midtown and the Edgewood District, Sams reports.
Crowdfunding, which allows companies to offer stocks
directly to the general public, is made possible by key provisions in the Jobs
Act, Sams notes.
• “UPSIDE
AHEAD: Office Recovery Accelerates In First Half, Best Yet to Come” by
Randyl Drummer of CoStar.
Office occupancy and rental rates rose at a modest but
steady pace during the second quarter, while the national vacancy rate dropped from
12.7 percent to 12.1 percent year-over-year, Drummer reports.
Net absorption of office space across the U.S. rose 25
percent in the first half of the year when compared to the same period last
year; absorption is still being dampened by tenant shadow space left over from
the recession, according to CoStar analysts.
Very low levels of new construction are contributing to the
decline in vacancies, Drummer reports.
• “Cousins
to Buy Texas Office Portfolio for $1.1 Billion” by Elizabeth Dexheimer of
Bloomberg.
Atlanta-based real estate development trust Cousins
Properties Inc. will buy a portfolio of Texas office buildings for $1.1
billion, Dexheimer reports.
The deal is a huge bet for Cousins that Texas’ commercial
property market will continue its fast-paced growth. The price is close to
Cousins’ entire market value of $1.28 billion, Dexheimer reports.
The deal means that half of Cousins’ portfolio, on a
square-foot basis, is in Texas; previously, the majority of the portfolio was
in metro Atlanta, according to David Toti, analyst with Cantor Fitzgerald LP.
• VIDEO:
“Real Estate Recovery Will Be Elongated, Analyst Says” from REIT.com.
In
this clip, Carisa Chappell of REIT.com discusses the ongoing real estate
recovery with Bruce Garrison, managing director with Chilton Capital. Garrison
discusses which investors find REITs most appealing in the current market
environment. He also explains how the elongated recovery will affect investor
behavior.