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.
• Why Are Development Costs Getting Higher in Major U.S. Cities? by Steve Pellegren for National Real Estate Investor.
“Land costs in the urban cores have dramatically escalated, making it difficult for developers to find developable parcels that pencil. Adding to the issue of expensive land prices, in December 2014, the Wall Street Journal reported that construction costs are rising faster than the inflation rate: the U.S. Labor Department’s consumer price index had risen only 1.3 percent above the previous year, while the construction index was higher by 5.2 percent.”
• Foreign Money Is Pouring Into U.S. Real Estate, and It's Not Just Houses by Sarah Mulholland of Bloomberg.
“Demand for property from warehouses to skyscrapers is booming, helped by more than six years of Federal Reserve efforts to stimulate economic growth by keeping interest rates low, and stockpiles of cash from overseas investors seeking a haven. About $24 billion in foreign capital flowed to U.S. properties in the first quarter, more than half the total for all of 2014, according to Cushman.”
• Raising the Roof Making All the Difference in Warehouses by Robbie Whelan of the Wall Street Journal.
“Warehouses began to get taller in the U.S. even before the recent, explosive growth of e-commerce, as new automation technologies such as racking robots and new forklifts came into use, allowing logistics companies to access items stored at loftier heights. That saves money by allowing retailers to build vertically, rather than horizontally, which requires more land. Overall size is rising as online retailing grows, forcing retailers to keep a wider variety of products on hand.”
• How Can Shopping Centers Avoid Becoming Easy Targets of Serial ADA Litigation? by Georgia Buckhalter Thompson for Shopping Center Business.
“The only sure way to avoid serial or abusive ADA litigation is for owners and operators of shopping centers to conduct audits of their properties and correct any violations before falling victim to a lawsuit—or multiple lawsuits as the case may be. Identifying and correcting violations before they become a problem costs far less than litigating the case and ultimately making these same corrections. In these situations, an ounce of prevention is worth a pound of cure.”
• Boomer Housing: One Size Does Not Fit All by Manny Gonzalez of Builder.
“Emerging from the frenzy driven by the Gen Y apartment craze that brought housing out of the Great Recession, the ones who succeeded there are foresighted enough to see that the parents of the Gen Y renters, the Baby Boomers, will be looking for amenity-rich communities.”