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.
• “Regulatory
Break for Mixed-Use Projects” by Joe Gose of The New York Times.
A recent Federal
Housing Administration (FHA) rule change allows the federal government to issue
mortgages for condos located in mixed-use buildings with commercial footprints of
up to 35 percent, up from the previous limit of 25 percent. That has some
developers, like those of the Ponce City Market development in Atlanta, more
strongly considering condos as opposed to apartments, Gose reports.
The change is part of an overall change in FHA policy aimed
at increasing the development of condominiums and mixed-use properties. The
agency also recently increased the number of units that investors can own in a
development and loosened up personal-liability rules that apply to the boards
and officers of condominium associations.
“We’ve learned that the mixing of development makes for a
better urban design, so towns and cities are designing codes to encourage it,
and the market is showing interest,” John K. McIlwain of the Urban Land
Institute told Gose.
• “Blackstone
Takes Over 13 Hotels After Sale Process Fails” by Brian Louis of Bloomberg.
Blackstone Group LP has taken control of more than a dozen
hotels from Eagle Hospitality Properties Trust Inc. after the hospitality firm was
unable to find buyers for the portfolio and pay off debt held by Blackstone,
Louis reports.
Monday marked the deadline for sale, but Eagle said it was
unable to sell the properties at a price that would satisfy the debt, according
to Louis. The portfolio includes 13 hotels, including Embassy Suites in Boston,
Denver and Tampa, Fla.; and a Marriott in Cincinnati.
• “Rent
Perks for Landlords: Transit-Oriented Apt. Developers Reap Occupancy, Income
Premiums” by Randyl Drummer of CoStar.
High gas prices and heavy traffic have younger workers and
Baby Boomers looking toward city life, and multifamily developers are taking
notice by starting more projects close to public transportation, Drummer
reports.
There’s been a significant shift over the last couple of years
toward projects within walking distance of rail and bus lines, and the landlords
of such projects collect higher rents and enjoy higher occupancies, according
to CoStar research.
Municipal planners also are focused on creating
transit-oriented developments (TODs) with a mix of office, shopping and
entertainment located closely together.
Forty-two percent of units under construction today are
within short walking distance to trains and buses, according to CoStar’s third
quarter report on the multifamily sector.
State and local governments are becoming more interested in
TODs because they believe the developments lead to more economically prosperous
communities, Drummer notes. Some governments are creating incentives to
encourage such growth.
• “Miami
Beach Walgreens Fetches $1,300 Per SF” by Jennifer LeClaire of Globe St.
A 22,857-square-foot Walgreens drugstore in Miami Beach just
traded for $30 million ($1,312 per square foot), making it the second-highest price
paid for a drug store in the United States and the highest price for a
net-leased asset in Miami Beach, according to LeClaire.
The store’s prime location in Miami Beach’s Art Deco
District made it especially valuable, according to Sean Shahar Ziv of Marcus
& Millichap, who represented the seller.
“Miami Beach’s combination of a substantial tourism base
together with a year-round dense population creates an ideal scenario for
retail investment,” Anthony Blanco of The Shopping Center Group told LeClaire.
• “Starbucks
Plans Massive U.S. Expansion. Can Its Growth Plan Succeed?” by Elaine
Misonzhnik of Retail Traffic.
Starbucks is planning to open at least 1,500 new units in
the United States over the next five years, even after closing many locations
only four years ago, Misonzhnik reports.
The chain is growing in an effort to maintain its market
share as McDonald’s continues to push its coffee line, according to Jeff Green
of retail real estate consulting firm Jeff Green Partners.
Over-expanding got Starbucks in trouble in the middle part
of the last decade, Misonzhnik notes, and some retail analysts are concerned
the new push is too aggressive.
Starbucks risks losing brand appeal if it can be found
anywhere and everywhere, Doug Stephens of Retail Prophet told Misonzhnik.