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.
• “U.S.
Office Vacancy Rate Falls to Almost Three-Year Low” by Hui-yong Yu of
Bloomberg.
Demand in the energy and technology sectors combined with a
lack of new construction have dropped U.S. office vacancy rates to their lowest
levels since the end of 2009, according to a new report by Reis.
As of Sept. 30, the national vacancy rate was 17.1 percent,
only slightly higher than in fourth-quarter 2009, when it was 17 percent, Yu
writes.
Energy and technology hubs like San Francisco and Houston
are seeing the most demand for office space.
Both asking rents and effective rents rose in the third
quarter, the eighth consecutive quarter of positive growth, according to Ryan
Severino of Reis.
Additionally, as the office market improves, landlords are
starting to end concessions like free rent, Asieh Mansour of CBRE Group told
Yu.
• “Apartment
REITs Are Outperforming, Says Moody’s Report” by Bendix Anderson for
National Real Estate Investor.
Apartment REITs have performed particularly well during the
recovery, according to a new report by Moody’s Investors Service. Stock market
prices for apartment REITs are more than triple the lows they reached during
the real estate crash, and they have grown more quickly than those in the
S&P 500 during the recovery, Anderson writes.
Furthermore, according to data compiled by NREI, apartment
REITs have outperformed the broader REIT market since 1994.
For the most part, apartment REITs are focusing funds on new
development and redevelopment, Anderson writes.
• “Landlords,
Retailers Think Out of the Box as Cycle Swings Upward” by Randyl Drummer of
CoStar.
Retail real estate executives are optimistic about the
recovery of their sector, according to a group of panelists at the recent International
Council of Shopping Centers’ Western Division Conference in San Diego.
Among the positive signs cited by the panelists: retailer
expansions, rising occupancy rates and low interest rates that should bring
sustained investment capital.
“We have issues, but as an industry, our best days are ahead
of us,” said panel moderator Patrick Donahue, chairman and CEO of Donahue
Schriber. “There seems to be tremendous capital flows into real estate, so there
will be tremendous investor interest … [capitalization] rates will likely
remain low and maybe go lower.”
Panelists also discussed the best ways for retailers to stay
competitive in the face of increasing Internet shopping.
• “Housing
Recovery Could Slow Multifamily Growth” by Carisa Chappell of REIT.
The recovering housing market has many in commercial real
estate wondering how it will affect the thriving multifamily sector, Chappell
writes.
According to Ric Campo, CEO of Camden Property Trust, there
is room for both the single-family housing and multifamily markets to thrive
and to coexist, as they have done in the past.
Others in the industry say the housing recovery will impact
the multifamily market, but add it won’t completely stall the apartment sector’s
momentum. Additionally, the housing market should strengthen the job market and
that would benefit the multifamily sector, according to Rich Anderson, an
analyst with BMO Capital Markets.
“Being in the rental business has been the name of the game
lately, but the American dream has not been to rent,” Anderson told Chappell.
“We can’t live in a weak housing market forever.”
• “An
Experimental New Starbucks Store: Tiny, Portable, and Hyper Local” by Mark
Wilson of Fast Co.
As retailers look for innovative ways to grow, Starbucks is
taking a new approach to coffee houses, building tiny, highly conceptualized
stores that consist of pre-fabricated buildings, Wilson writes.
These stores appear in markets where space is limited and
that cannot sustain a traditionally sized Starbucks store. These drive-up and
walk-up stores feature just enough space for three- to five-employee operations
and are eco-friendly.
The buildings’ exteriors often feature local art, according
to Wilson.