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.
• “Both
Job Cuts and New Jobs Increased in October” by Mark Heschmeyer of CoStar.
Downsizing activity reached its highest level in five months
in October, when planned job cuts increased by 41 percent when compared with
the preceding month, according to a new report by Challenger, Gray & Christmas
Inc. The automotive sector led the job cuts, with plans to trim 11,615 workers.
The U.S. economy did, however, add 171,000 net new jobs last
month, according to the Bureau of Labor Statistics.
“The final three months of the year tend to see heavier
downsizing activity as companies make year-end adjustments,” John A. Challenger
of Challenger, Gray & Christmas told Heschmeyer.
Challenger, Gray & Christmas said there has been an
uptick in retail hiring as the holiday season approaches, but noted employment
gains in the sector were virtually unchanged from a year ago.
• “Echo
Boomers Important Multifamily Driver” by Carrie Rossenfeld of Globe St.
The lingering effects of the housing crisis continue to push
former homeowners into the rental market, while Echo Boomers are helping boost
the sector’s fundamentals as well, Rossenfeld reports.
The Echo Boomer generation of 95 million is transitioning
into the workforce and looking for new product in A+ locations, Jeff Meyers of
Meyers Research told Rossenfeld.
The national occupancy rate rose to 93.9 percent in the
third quarter, and Meyer says the rate will continue to rise in the short term.
He also says demand for Class-A+ properties should increase as well.
• “Slow
Growth in U.S. Office Sector” by Carisa Chappell of REIT.com.
While office REITs are underperforming when compared with
the REIT sector as a whole, they are enjoying much stronger returns than they
were one year ago, Chappell reports.
Year-to-date total returns for office REITs as of Nov. 8
were 12.63 percent versus 1.9 percent during the same period last year,
according to data from the National Association of Real Estate Investment
Trusts.
The office sector currently has its lowest vacancy rate
since the end of 2009, according to Jason Lail of SNL Financial. Citing data
from REIS, he also noted that national asking rents grew from $28.17 per square
foot to $28.23 per square foot in the third quarter on a year-over-year basis.
Overall, though, third-quarter office REIT earnings provided
“mixed to disappointing news,” said Michael Knott of Green Street Advisors.
Knott says a lack of tenant confidence is a continuing problem for the sector.
• “Home
Depot Profit Tops Estimates as Housing Market Heals” by Chris Burritt of
Bloomberg.
Home Depot posted a higher-than-expected third-quarter
profit as the retailer benefitted from the recovering U.S. housing market,
Burritt reports.
New-home sales are occurring at their fastest pace in two
years, and construction starts have reached a four-year high, according to Burritt.
Home Depot stores saw customers visit more often and spent
more per trip. The average transaction value in the third quarter rose 2.9
percent to $54.55, and the number of purchases climbed 1.7 percent to 331
million.
In addition to the impact from the improving housing market,
Hurricane Sandy provided a boost in sales to home-improvement retailers,
Burritt adds.
• “Hotels
Predict Revenue Lost to Storm Can’t Be Recouped” by Kris Hudson of The Wall
Street Journal.
Hoteliers are predicting they won’t be able to recoup
revenue and bookings lost during Hurricane Sandy, Hudson reports.
Many hoteliers say cancellations are outpacing bookings from
stranded guests and recovery workers, and little of the revenue lost from
canceled conferences is expected to be reclaimed through insurance.
“For the most part, this will be lost
business that you're never going to get back,” Ray Martz, chief financial
officer of Pebblebrook Hotel Trust, which owns nine hotels affected by Sandy,
told Hudson.
Hotels often avoid enforcing penalties on groups that cancel
events as those groups might later refuse to host additional events at those facilities,
Hudson writes.