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 Big-Box Downsize Effect: Making Sense of Brick-and-Mortar Vacancies by Casey McKeon for Shopping Center Business.
“The big-box ‘category killers’ aren’t downsizing for any one particular reason. In fact, there are a variety of factors at play. One is the consolidation occurring among competitors. Once complete, a consolidation inevitably leads to a reduction in stores. Additionally, more and more sales are taking place online, with shipping direct from the warehouse to the consumer’s front door a more common model of product delivery.”
• Commercial Real Estate: Back In Demand by Dawn Wotapoka of REIT.com.
“It’s way too soon to worry, especially in marquee cities such as San Francisco, New York, Houston and Chicago. In inflation-adjusted terms, real construction spending is up 54 percent from its bottom value in 2008 and 2009. The sectors with the most growth are multifamily, which has nearly doubled from its trough, and lodging, which has climbed a stunning 75 percent. Office construction, meanwhile, is up nearly 55 percent, says [Calvin] Schnure, adding there aren’t big concerns about overbuilding in that sector right now.”
• Some Firms Learn You Just Can’t Beat the ‘Burbs by Robyn A. Friedman of the Wall Street Journal.
“‘There’s so much chatter about millennial hiring and downtown urban areas, but millennials age and millennials get married and settle down, and inner city schools are not particularly good,’ said Chris Epstein, president of BECO Midwest in Chicago. ‘So the same thing that drove our parents and grandparents out of the cities will perhaps drive these kids out of the city too.’”
• Is Shopping Center Market Finally Positioned For New Supply Growth? by Randyl Drummer of CoStar.
“Most of the large construction projects under way in the first quarter can be described in some way as malls, a format that many analysts had written off for dead just a couple years ago … ‘Malls are being built today. They just look a little different,’ [Ryan] McCullough said.”
• An Industrial Real Estate Revolution by John Gates for NREI.
“So why now? Industrial real estate has always been the steady and less glamorous cousin of office real estate, but now it is looking more attractive than ever. The strong macroeconomic climate has positioned the U.S. as a safe and stable environment for investors who may be experiencing economic volatility at home.”