Each Wednesday, The Wrap
presents a compilation of recent noteworthy commercial real estate stories from
a variety of publications. Below are four stories that caught our eyes in
recent days.
• “Malls
Get Facelift to Pull In Shoppers” by Kris Hudson of The Wall Street Journal.
The era of new-mall development is over, at least for a
while, as many mall owners are now looking to renovations to help malls compete
with online shopping, Hudson writes.
Renovations can offer higher returns on investment than new
developments, Hudson notes. One example is Twelve Oaks Mall in Novi, Mich.,
where owner Taubman Centers says it got a 10 percent return on a $63 million
project that added a new wing to the mall.
In their renovations, mall owners are concentrating on movie
theaters, restaurants and similar sites to lure shoppers away from their
computers, according to Hudson.
Owners are only choosing top-performing malls to upgrade in
order to get the highest returns, Hudson notes. Simon Property Group is
planning to redevelop 25 percent of its top malls, 10 percent of its mid-class
malls and none of its lowest-performing malls, according to real estate
research firm Green Street Advisors.
• “Strong
Investment in Affordable Housing” by Bendix Anderson for National Real
Estate Investor.
Affordable housing properties have maintained high
occupancies and strong operating income during the financial crisis, according
to a new report from accounting firm CohnReznick. This is in part because
affordable housing is in short supply, the report says.
“When it comes to affordable rental housing, this report
confirms that we have a critical shortage not only in our major cities, but
across the entire country,” according to Fred Copeman of CohnReznick.
Poor economic conditions have helped keep affordable housing
projects occupied, according to the report.
Of the 17,118 properties covered in the report, only 9.5
percent were considered underperforming in 2010, meaning they had occupancy
rates below 90 percent or had low debt-service coverage ratios. This compares
to the 12.6 percent that were considered underperforming in 2009.
• “Survey
Finds CRE Investors Refocusing on Strategy as Fog of Uncertainty Begins to
Lift” by Randyl Drummer of CoStar.
As uncertainty eases after the 2012 election, investors are
refocusing on opportunities in commercial real estate, according to the
fourth-quarter 2012 PricewaterhouseCoopers Real Estate Investor Survey.
Survey respondents expect cap rates to continue to compress
in the multifamily sector and begin compressing across all property types,
leading to an increase in sales activity in 2013.
Many real estate firms were wary of investment during the
time before the U.S. presidential election, but survey respondents seem more
optimistic going into the New Year, Drummer reports.
“We’re starting to see good news eclipse the bad news, and
that makes us want to invest more capital in CRE assets,” one respondent said.
Still, CRE recovery remains uneven and limited to only
certain locations and sectors, Drummer noted.
• “High-Tech
and Seniors: No Longer Opposites” by Robert Carr of National Real Estate
Investor.
Many in seniors housing are realizing that incorporating new
technologies into properties can make them more attractive to potential
tenants, Carr reports.
Michael Schonbrun, founder and CEO of Balfour Senior Living,
has found his residents are very interested in using iPads for reading in large
print and large-screen televisions set up to use Skype to connect with distant
family members.
Seniors housing facilities are also looking at using more
monitoring devices to track at-risk individuals as well as sensors than can help
detect undiagnosed health problems, Carr reports.
It also seems seniors are getting more comfortable with the
idea of using robots to aid in everyday tasks, according to a recent study by
Georgia Tech’s Human Factors and Aging Laboratory.