Wednesday, February 29, 2012

US Commercial Real Estate Markets Improving, Says NAR Report

US commercial property market are showing signs of improvement, with vacancy rates expected to drop over the coming year. According to the National Association of Realtor s’(NAR's) quarterly commercial real estate forecast, a strengthening across all sectors of the market is anticipated. Two-thirds of the professionals questioned stated they believe there will be an improvement during the first quarter of 2012, while rental increases are also on the cards. NAR chief economist Lawrence Yun commented: "Sustained job creation is benefiting commercial real estate sectors by increasing the demand for space. Vacancy rates are steadily falling."
A decline in the empty space available in the office, industrial, retail and multifamily housing sectors is predicted between the first three months of this year and the same period in 2013, with vacancy rates in the retail industry likely to fall the most - dropping from 11.9 per cent at present to 11 per cent in a year's time.

Annual industrial rent is expected to rise 1.8% in 2012 and 2.3% next year. Net absorption of industrial space nationally is seen at 40.6 million square feet this year and 57.7 million in 2013.

Retail vacancy rates are forecast to decline from 11.9% in the current quarter to 11% in the first quarter of 2013.

Monday, February 27, 2012

New York City Widened its Lead Over Competitors

NYC increases lead over London as top commercial property market

After taking over the top spot for global property investment in the third quarter, New York City widened its lead over competitors. The city attracted $35.7 billion in commercial property sales, including multi-family buildings, compared to $29.2 billion in London and $22.6 billion in Tokyo, according to a global property market report released today by Cushman & Wakefield.

Overall, global sales activity, including multi-family properties, rose 14 percent in 2011 to $808 billion, and the volume is now 83 percent greater than 2009′s lows. Half of all activity occured in Asia, but the North American market showed the greatest improvement in the last year, with investment volumes rising 52 percent. That increased demand led to the greatest compression of yields in the Americans, as capitalization rates fell in the region by 31 basis points, compared to the global average of 20 points. And overseas investors took notice, as the Americas saw a 94 percent increase in cross-border investment activity.

Thursday, February 23, 2012

Property Group is Planning to Develop 2.2 million sf of Mixed-Use Space

Property Group is planning to develop 2.2 million square feet of mixed-use space

After years of battles, Washington may finally realize a decades-old desire to rejoin two downtown neighborhoods with a $1.3 billion project on a platform over a stretch of Interstate 395.

City officials say they hope to close in the next 60 days on the sale of six embattled acres of land and air rights to Property Group Partners, a developer that owns or manages about three million square feet of office buildings, mostly in Washington. Property Group is planning to develop 2.2 million square feet of mixed-use space, mostly office with some retail and housing.

Friday, February 3, 2012

Commercial Property Values in the U.S. Probably will Climb About 6 %

Commercial-property values in the U.S. probably will climb about 6 percent in the next six months, based on recent trading in real estate investment trusts and fixed-income yields, Green Street Advisors Inc. said.
“The increased optimism being expressed by REIT investors and the decreased skittishness evidenced in the high-yield market should eventually find their way into property valuations,” the Newport Beach, California-based research firm said today in a report introducing its Commercial Property Price Forecast. “That’s a notable improvement over the outlook a few months back.”
Property values were little changed during the past several months after a two-year rally that brought them to within 10 percent of record highs reached in 2007, Green Street said in a Jan. 6 report on its Commercial Property Price Index.

Thursday, February 2, 2012

Two Office REITs Post Higher Earnings

Boston Properties Inc. and SL Green Realty Corp. reported stronger-than-expected quarterly earnings, a sign that the nation's largest office landlords have been able to boost revenue despite tepid job growth.

Boston Properties, which owns office buildings in New York, San Francisco and Boston, reported late Tuesday that fourth-quarter funds from operations, a key profit metric, was $1.21 a share, two cents higher than analysts projected.

Meantime, SL Green, Manhattan's largest office-building owner, reported late Monday that funds from operations rose to $1.02 a share in the fourth quarter, up from 97 cents in the same period last year and $1.01 in the third quarter. Analysts had projected per-share funds from operations of $1 for the fourth quarter.

Wednesday, February 1, 2012

Blackstone Spies Retail Recovery

Blackstone Group LP's $11 billion bet on retail property is showing signs of paying off.

As the retail property market struggled over the past year with high vacancies and competition from online shopping, the private-equity giant made a bold play: It bought up three major retail portfolios to become one of the largest owners of U.S. shopping centers.

Now there are signs that the industry is near its bottom, and perhaps starting a slight recovery.

In the span of 12 months, Blackstone snapped up Centro Property Group's 588 U.S. centers, 36 grocery-anchored centers from Equity One Inc. and—in January—a 95%..

Goldman Fund Plans Fight Over Hancock

A Goldman Sachs Group Inc. real-estate fund that has walked away from a number of struggling investments is taking a different approach with a Chicago skyscraper, deciding to fight its creditors rather than surrender ownership of the building.

Goldman and its partner, property manager Golub & Co., are required to repay on Feb. 9 some $400 million in debt that they put on the John Hancock Center after they purchased the 100-story tower in 2007. But a default is likely because the owners haven't been able to sell or refinance for that amount.