Each Wednesday, The Wrap presents a compilation of recent noteworthy commercial real estate stories from a variety of publications. Here are five stories that caught our eyes in recent days:
• “More Access to Capital for Senior Housing” – by Beth Mattson-Teig for National Real Estate Investor. Talk about pleasant surprises. It may be commercial real estate’s least visible sector but senior housing is quietly in the midst of an impressive run.
Investment sales of senior housing properties spiked 340 percent in 2011, according to Mattson-Teig, and industry members say more good times are on the horizon. In a survey conducted by NREI and Senior Housing Investment Advisors, 64 percent of respondents said they expect another increase in sales this year and 63 percent said financing should become readily available in 2012.
“Right now, if you are not aggressive in acquiring portfolios, then somebody else will be,” David Hegarty, president and COO of Senior Housing Properties Trust, told Mattson-Teig.
• “King and Queen Buildings Hit the Market” – by Douglas Sams of the Atlanta Business Chronicle. Two of metro Atlanta’s most visible office properties are for sale. TIAA-CREF is placing Concourse Corporate Center, a 2-million-square-foot development that includes the “King” and “Queen” office towers that loom over the intersection of I-285 and Georgia 400, on the market.
The owner “could get anywhere from $350 million to $400 million for the five-building Concourse Corporate Center, or $166 to $190 a square foot,” Sams wrote.
TIAA-CREF declined to comment about why it’s selling the complex, but the company “is likely reallocating investment toward other types of properties, including apartments — the favorite of investors at this point in the cycle because of their strong fundamentals,” Sams added.
• “Retailers Favoring Shopping Centers Over Malls for Expansion” – by Mark Heschmeyer of CoStar.com. Retailer demand for future space is on the rise, but not all retail landlords stand to benefit, according to Heschmeyer’s summary of research from ChainLinks Retail Advisors.
“Demand is being driven by discounters, grocery store chains, off-price apparel retailers, fast food and fast casual dining concepts,” Garrick Brown, national retail research director for ChainLinks, told Heschmeyer. “Growth from those players will help to lower vacancy for most shopping center types. However, demand is down from a lot of the mid-priced chains … Between that and planned closures from the likes of Sears, The Gap and Payless Shoes, this will translate into increasing mall vacancy in the months ahead.”
• “Multifamily Financing Expands” – by Neil D. Freeman of Aries Capital for Multi-Housing News. Multifamily properties are some of the few commercial real estate types to perform well in recent years, and the sector’s low vacancy rates and rent growth is making new construction financing easier to obtain.
“Capital sources’ confidence level is boosted by improving multifamily conditions. The combination of renting by choice, housing formation in the generation Y sector, a weak single-family housing market and an improving economy all make for a strong rental market,” Freeman wrote.
However, don’t expect to see new apartments popping up everywhere. “Investments in major market new construction apartment buildings is booming and should remain robust over the next few years as long as interest rates stay below 5 percent permanent rates,” Freeman explained. “However, we don’t expect to see secondary markets attracting the same large-scale new construction of market-rate apartments as the rents do not justify the risk.”
• VIDEO: “Capital Recovery Must Speed Up to Ease Debt,” from GlobeSt.com. In the clip below, Dennis Vaccaro, senior managing director of Faris Lee Investments, discusses how the capital markets are currently affecting commercial real estate sales and why single-tenant, net-leased properties are in such high demand.