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.
• The Top 10 Issues Facing Commercial Real Estate by Darren Currin of the Journal Record.
“There are a number of big issues facing the national commercial real estate industry, but some of the largest appear to be related to the energy sector, jobs and the growing influence of the millennial generation. These issues topped the CRE Top Ten Issues Affecting Real Estate report developed annually by The Counselors of Real Estate External Affairs Committee.”
• Avoiding Retail Vacancies with Flexible Retail/Residential Design by Will Macht of Urban Land Magazine.
“Retailers are reluctant to open stores in places without a critical mass of other stores and shoppers. Retail space built under housing is more difficult and expensive to develop than either space alone. Lenders are especially wary of having vacant stores below rental housing. Housing developers are reluctant to hold, lease, and operate small retail spaces that are peripheral to their principal development business. Retail spaces must comply with more stringent zoning and building code requirements, require more durable materials and storefronts, and cost more to build.”
• Commercial Real Estate Didn't Boom and Bust. Is This Why? by Peter Coy of Bloomberg Businessweek.
“When the U.S. housing market boomed and busted in the past decade, commercial real estate was comparatively placid. Prices were more stable, there was little overbuilding, and bankruptcies never soared. The question is why. A research paper attributes the stability of commercial real estate at least in part to the ‘civilizing influence’ of real estate investment trusts, which are a bigger presence in the market than they are in housing.”
• Construction Spending Rises in April for Third Straight Month by REBusinessOnline.com.
“Construction put in place totaled $954 billion in April, 0.2 percent above the revised February total and 8.6 percent higher than in April 2013. The year-over-year growth so far in 2014 has exceeded the full-year increase of 5 percent recorded from 2012 to 2013.”
• Job Growth, Single-Family Sluggishness Drive REIT Performance by Les Shaver of Multifamily Executive.
“‘From an operating perspective, things are better than expected,’ says Dave Bragg, managing director at Newport Beach, Calif.-based Green Street Advisors. ‘Most companies exceeded first quarter expectations.’
While Bragg says job growth has played a role, the tepid single-family sales market was a factor as well. Across apartment REIT world, gross turnover declined to 47 percent. That’s the third straight year of decline. Moveouts to single-family homes moved up from 13.7 to 13.8 percent, according to Green Street.”