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.
• “Approaching a Tipping Point? U.S. Office Rent Growth Lags Despite Rising Tenant Demand” by Randyl Drummer of CoStar.
Rising office absorptions and falling vacancy rates in the United States have done little to increase rents for office landlords in most markets, CoStar Group reported in its Second-Quarter 2012 Office Review and Outlook.
Year-over-year office job growth has slowed since the first quarter, but is still outpacing the broader U.S. job market. Net absorption increased from 8 million square feet in the first quarter to 18 million square feet in the second quarter.
Office demand is increasing as the job market improves, but the vacancy rate is only slightly down as tenants fill shadow space left by massive job losses before they look to lease additional space.
Rents have only increased 0.7 percent from this time last year, but landlords in top markets are starting to pull back on rent concessions, tenant improvement allowances and other tenant perquisites, CoStar reported.
• “Jamestown puts 999 Peachtree building on the market” by Douglas Sams of Atlanta Business Chronicle.
Jamestown has put its Midtown Atlanta office tower 999 Peachtree on the market. The investment firm bought the building in 2007 for $127 million and has increased its occupancy rate to 94 percent, Sams reports.
Jamestown is seeking a target sale price above $160 million for the 28-story tower, which houses law firm Sutherland, Oxford Industries and the Empire State South restaurant.
• “Pension Board Invests $355M in U.S. Apartments” by Robert Carr of Globe St.
The Canada Pension Plan Investment Board says it is investing $355 million into seven U.S. multifamily properties in the San Francisco, Chicago and Dallas markets.
The pension board, which covers about 18 million Canadian contributors and beneficiaries, finds the U.S. multifamily market an attractive sector because of the limited supply, current demographic trends and declining home ownership in the country, according to Peter Ballon, vice president and head of the board’s real estate investments for the Americas.
• “Manufacturing slows in June, construction spending up in May” by Paul Davidson of USA Today.
Manufacturing activity shrank last month for the first time in three years, according to a survey by the Institute of Supply Management. Both indexes for factories and new orders fell, raising concerns about job growth and the overall economy, according to Davidson.
The unusually warm winter inflated growth in the first quarter, causing a temporary snap-back effect in June as factory activity dropped, said economist Daniel Meckstroth.
Other forces like the economic slowdown in Europe could harm manufacturing for the rest of the year, Meckstroth said.
• VIDEO: “Multifamily Financing Still Red Hot” from Globe St.
Grace Huebscher of Beech Street Capital shares her opinion on liquidity within the market, how a reduction in Fannie Mae and Freddie Mac could affect the sector, how the election might impact multifamily and the nation’s trends in home ownership.