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.
• “Boom
in Student Housing Construction Stokes Concerns of Oversupply” by Randyl
Drummer of CoStar.
A large volume of student-housing projects have been
announced recently during a time of lower-than-expected college enrollment
numbers, slowed pre-leasing and rising tuition costs, raising concerns over
whether demand will meet supply, Drummer reports.
However, developers say pent-up demographics will drive
demand for dorms and off-campus housing in the coming years, according to
Drummer.
More than three-quarters of the 13.5 million students now
enrolled in four-year undergraduate programs at large public institutions live
off-campus, which creates a supply gap of about 1.5 to 2.2 million beds, said consultant
Michael Gallis during a Campus Crest Communities presentation.
However, investors and analysts are concerned about the
overwhelming amount of supply ready to hit the market between now and 2015. “We’re
very concerned in general about student housing,” said Hans Nordby of CoStar’s
Property and Portfolio Research. “[T]he amount of student housing supply in
this country right now is almost shocking.”
• “CRE
Can Help Solve Climate Change” by Rayna Katz of Globe Street.
During last week’s State of the Union address, President
Obama issued a call-to-action to cut energy consumption in homes and businesses
in half over the next 20 years, and New York City’s commercial real estate
industry could help significantly in this effort, according to a new study by
the Urban Green Council.
As the country’s largest city, New York City could feasibly
cut its carbon emissions 90 percent by 2050, the study says.
Technologies like improved insulation, heat pumps and
transportation electrification could help reduce carbon pollution from New York
City’s buildings and transportation, which together make up 96 percent of the
city’s greenhouse gas emissions, according to the report.
• “Houston,
Energy Sector’s Peak Nowhere in Sight” by Robert Carr of National Real
Estate Investor.
More than half of the top performing office markets in the
United States today are primarily technology- or energy-driven, as the country
takes steps toward independence from foreign energy sources, Carr reports.
Houston is leading the pack, enjoying an unemployment rate
at less than 6 percent. The city’s 195 million square feet of office space only
make up 4 percent of the U.S. total, yet Houston accounted for almost 13
percent of the country’s total office absorption in the past year, according to
a fourth-quarter report from Jones Lang LaSalle.
Houston is expected to remain the U.S. energy capital for
2013 and beyond. More than 50 percent of the 4.2 million square feet of office
space now under construction has been pre-leased, Carr reports.
“Developers just can’t keep up with demand in Houston,” said
Rudy Hubbard of JLL. “[T]here’s far more demand for people to own office
buildings than supply.”
• “Bill
Proposed to Require Online Retailers to Collect Sales Tax” by Allen Kenney
of REIT.com.
A bill introduced in the House of Representatives last week
is aimed at requiring online retailers to collect sales taxes on purchases,
Kenney reports.
The Marketplace Fairness Act would help level the playing
field between online retailers and brick-and-mortar stores, supporters say.
States lost an estimate $23.3 billion in uncollected sales taxes last year,
according to the National Conference of State Legislatures.
The bill has garnered support from industry organizations
such as NAREIT and even some online retailers, like Amazon, Kenney reports.
• “New
Hubs Arise to Serve ‘Just in Case’ Distribution” by Matt Hudgins of The New
York Times.
Retailers and logistics companies have altered their supply
chains by adding more distribution hubs, creating real estate opportunities in
markets beyond traditional seaport hubs, according to CoStar.
The changes come as Hurricane Sandy and other unexpected
events have prompted companies to alter just-in-time management to what is
called “just-in-case” management.
Just-in-case is a response to the vulnerability of
just-in-time supply chains, said Rene Circ of CoStar. Just-in-case planning
keeps merchandise available should the supply chain by disrupted by an unforeseen
event, such as when ports in New Jersey and New York were affected by Hurricane
Sandy.
Companies are looking for a balance between “carrying the
minimum inventory possible, yet never running out of things, because inventory
equals cost,” Circ told The New York Times.
Retailers looking for competitive edge are now offering fast
shipping from nearby distribution centers, Hudgins reports.