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.
Rates Decline Amid Slow Commercial Real Estate Recovery” by Carisa Chappell
High demand from investors and low interest rates continue
to push down commercial real estate capitalization rates, according to a report
from consulting firm PricewaterhouseCoopers (PwC).
In the second quarter of 2013, the combined overall cap rate
fell to 6.91 percent, marking the twelfth consecutive quarter that cap rates
have fallen, PwC’s report noted.
Given the slow recoveries of both the commercial real estate
market and the broader economy, “overall cap rates remaining low is a mystery
to some of the real estate investors,” said Susan Smith of PwC’s real estate
Low interest rates and demand from both domestic and
international investors are helping drive cap rates down, Smith said.
Management Survey Shows Continued Caution among Retailers” by Marianne
Wilson of Chain Store Age.
Although retailers were expecting another strong year after
2012, it seems weather may have contributed to lower-than-expected sales and
traffic for some retailers so far in 2013, according to Levin Management’s
annual mid-year Retail Sentiment Survey.
A cooler start to spring and bad weather over the Memorial
Day weekend in the Northeast may be some of the reasons survey participants saw
their performances dip below expectations and are now becoming more cautious. However,
“the pace of hiring in the first half of 2013 and the positive impact of
e-commerce appear to be heating things up in time for summer,” Wilson writes.
Rates Seen Stalling Rise in Values” by Eliot Brown and Al Yoon of The Wall
The recent sharp rise in interest rates has the commercial
real estate industry concerned that the nearly four-year rise in property
values could end, Brown reports.
Until recently, low interest rates had been fueling rising
property values because lower borrowing costs enabled buyers to pay more, Brown
“We think that rising rates will largely cancel out rent
growth and stall out values,” said Tad Phillip, director of commercial real
estate research at Moody’s Investors Service.
Brings 400 Jobs to Atlanta, Locates in Ponce City Market” by Urvaksh
Karkaria of the Atlanta Business Chronicle.
Health IT firm athenahealth plans to invest $10 million in
relocating to the Ponce City Market development in Atlanta, Karkaria reports.
The company will lease up to 60,000 square feet and relocate
400 jobs from its current headquarters in Watertown, Mass., and 100 jobs from its
office in the Atlanta suburbs, Karkaria reports.
Ponce City Market is a $200 million mixed-use project under
development in a former Sears building.
Storefronts Now Housing Big Data” by Randyl Drummer of CoStar.
Sears has launched a new business unit, Ubiquity Critical
Environments, in an effort to convert some of its closed Sears and Kmart stores
into data warehousing, network colocation centers and business continuity
operations, Drummer reports.
Although Sears has been looking to other retailers to fill
some of its 330 closed locations, the effort to convert empty stores into data
centers fits into the national trend of landlords seeking non-traditional
tenants for big-box locations, Drummer notes.
Closed Sears and Kmart stores and operating real estate
together make up Sears’ most valuable assets, Drummer reports.