Commercial Real Estate Finance

Archive for the ‘Retail’ Category

This will probably be our last retail-focused Top 10 for a while–it’s time to look at some other asset classes. Since we already counted down the Retail Markets with the Highest Quoted Rents, let’s look at which retail markets are seeing the most improvement in their rents. Once again from Colliers’ 2013 Retail Outlook for North America (PDF), here are the Top 10 Retail Markets for Rent Growth:

10. Dallas/Ft. Worth, TX (1.83%)

9. San Jose/South Bay, CA (1.87%)

8. Omaha, NE (2.06%)

7. Houston, TX (2.18%)

6. Boston, MA (2.51%)

5. Boise, ID (2.65%)

4. Westchester County, NY (3.04%)

3. Miami-Dade County, FL (6.51%) Read the rest of this entry »

Following our ranking of the 10 Most “Absorbent” Retail Markets, here’s a list of the Top 10 U.S. Retail Markets with the Highest Rents, based on data published in the Colliers 2013 Retail Outlook for North America (here’s the PDF). This ranking is based on shopping center stats from the end of 2012 for the country’s biggest retail markets (with the exception of New York City).

10. San Diego, CA (Quoted rent per SF: $20.28)

9. Oakland/East Bay, CA ($21.04)

8. Washington, DC ($22.25)

7. Los Angeles, CA ($22.41)

6. Orange County, CA ($22.70)

5. Long Island, NY ($23.35)

4. Miami-Dade County, FL ($23.55)

3. San Jose/South Bay, CA ($26.15) Read the rest of this entry »

Last month, we ran an interview with Rob Odell, chairman of commercial insurance service Odell Studner Group. I asked him what he thought were the biggest changes in his industry, and this was his reply:

In the last 10 years we saw two of the greatest changes affecting real estate clients. First, the terrorism events of September 11, 2001. Prior to September 11, terrorism was never considered by insurance carriers writing real estate domestically. Second, the economic events of late 2008 to January 2009. These events prompted new standards of detailed underwriting unlike anything I had seen in my first twenty-plus years representing real estate owners.

It’s plain to see how the recession impacted members of the commercial real estate industry. We talk about these impacts all the time: a shift in demand from one asset class to another, changing population trends, growing and deteriorating CRE markets, and diminished development and transaction activity are all salient examples of the world’s recent economic troubles.

The first example Mr. Odell cites, terrorism, may have had less of an impact on CRE, but there’s no denying it has affected the balance sheets and strategies of commercial real estate owners and operators–at least indirectly. The industry most affected by this tragedy (other than industries with military contracts) was the insurance business. Read the rest of this entry »

This ranking is based on research published in Colliers’ 2013 Retail Outlook Highlights for North America (here’s the PDF). From 2012′s year-end absorption data for major retail markets, here are the Top 10 “Most Absorbent” Retail Markets in the U.S.!

10. Baltimore, MD (Retail space absorbed in 2012: 514,444 SF)

9. Boston, MA (549,034 SF)

8. Cincinnati, OH (550,102 SF)

7. Washington, DC (708,954 SF)

6. Las Vegas, NV (825,682 SF)

5. Denver, CO (934,929 SF)

4. Atlanta, GA (1,004,274 SF)

3. Seattle/Puget Sound, WA (1,047,510 SF) Read the rest of this entry »

Mensch 

Noun, informal. A decent, upright, mature and responsible person. 

Schlemiel 

Noun, slang. An awkward, clumsy, or unlucky person whose endeavors tend to fail; a loser.

Mensch of the Week:

Robert Squires

The Kislak Company

In a nation full of strip malls, parking lots, and general sprawl, it’s nice to know that “Main Street” is more than just a nostalgic buzzword thrown around by politicians pretending they’re not backed by large, multinational conglomerates. There are still towns (not just big cities) with bustling CBDs and local, independent businesses. These towns may be few and far between, and their mom-and-pop businesses more scarce, but they do exist.

Montclair, New Jersey, is one of these places. The small New Jersey community’s claims to fame include its association with HBO’s The Sopranos and its appearance at #9 on CNN Money‘s “Best Places for the Rich and Single.” As you can tell from the picture, Montclair has a distinctly “Main Street” image, with everything from brick sidewalks to quaintly horizontal traffic lights.

The latest issue of the Mid-Atlantic Real Estate Journal reports a recent, significant sale of unique CBD properties in Montclair and Hasbrouck Heights. The  three-property portfolio, marketed and represented by the Kislak Company’s Robert Squires, sold for about $5.3 million. According to Kislak’s press release, Mr. Squires helped the (unnamed) seller divest the following assets: Read the rest of this entry »

While having brunch with my family in our hometown of Sioux Falls, South Dakota, I had the surprising good fortune to enjoy a slice of the best raisin bread I’ve ever had. So good in fact that I asked the server for information about the bakery that supplied it–only to discover it wasn’t made by a bakery but a local guy working in his mother’s garage-turned-commissary.

After several phone calls and a long lunch, I realized that this baker represented more than just an advisory engagement opportunity for me.  After determining his options for a sustainable business platform, I quickly realized that this young man (and his uncanny baking skills) represented something more profound: the endangered demand for quality products in lieu of convenience.

David Napolitano is making incredible bread and supplying a small local specialty grocer along with two or three eateries in town, but the demand for his product is sure to outpace his ability to produce it. In order for David to continue making bread at a profit, he is forced to either

a.) Charge a price beyond what the market will bear.

b.) Outsource the production to a larger-scale manufacturing facility—in which case product quality will suffer

or c.) Collaborate with a complimentary concept (such as a restaurant, super-luxury hotel or bulk olive oil retailer) with both a scaleable platform and significant financial resources.

Gone are the days where local artisans and craftsman line the streets with their shops: specialty bakeries, coffee roasters, etc. Granted, more and more are popping up in major US cities. But outside those densely packed urban areas, suburbanites are driving to lifestlye centers and super-grocery chains. For most, there is no alternative to mass-produced, lower-quality products from corporate retailers. Read the rest of this entry »

We’ve already looked at the Top 10 Retail Markets for New Development, the Top 10 Discount Retailers, Top Retail Markets for New Supply, and Top 10 Largest Retail Markets–all of them based on data in the 2013 Colliers’ Retail Report (here’s the PDF). But we’re not done… I plan on milking this research for every Top 10 list it’s worth! With that said, here’s the latest ranking I’ve mined from this very thorough report (someone tell Colliers I said thanks).

Here are the Top 10 U.S. Retail Markets by Vacancy Rate:

10. Orange County, CA (7.2%)

9. Westchester County, NY (6.8%)

 7/8. (tie) Boston, MA (6.5%)

7/8. (tie) San Jose/South Bay, CA (6.5%)

6. Oakland/East Bay, CA (6.2%)

5. Pittsburgh, PA (5.7%) Read the rest of this entry »

Once again, today’s ranking is based upon data published by Colliers in its 2013 National Retail Outlook (click here for the PDF). Drawn from a selection of the United States’ largest retail markets, here are the Top 10 Retail Markets for New Supply:

10. Philadelphia, PA (341,178)

9. Seattle/Puget Sound, WA (359,259)

8. Westchester County, NY (382,794)

7. Oakland/East Bay, CA (413,797)

6. Milwaukee, WI (413,803)

5. Denver, CO (414,564)

4. Orlando, FL (416,855) Read the rest of this entry »

I know. It’s a stupid name for today’s post, but I couldn’t think of anything better.

It’s the weekend. Gimme a break.

We talk a lot about sustainability issues when it comes to office, hotel, and some high-end residential developments, but it’s far less common to hear issues of energy efficiency or sustainability enter discussions about retail, industrial, or the many other asset classes in commercial real estate. To a great extent, such progressive designs (often recognized with LEED certification for commercial properties or Emerald Certification for residential) presents the same opportunities and challenges for every market and asset class. Like other recent innovations (or fads, to the cynics), sustainable design is an appealing idea with ambiguous financial benefits.

Because of its high cost, not every building will be developed to meet the criteria for LEED Platinum certification, except when the builders/landlords are sure they can entice tenants who will pay the higher rents. Green buildings–particularly the “net zero” projects designed to exist with no carbon footprint whatsoever–are largely in the prototype phase.

Like Tesla sports cars, not everyone gets to drive them, as much as some would like to. The technology is still a luxury.

While typically less glamorous than a 60-story office tower, retail properties are beginning to receive the sustainable design treatment as well. Drug store super-chain Walgreens (NYSE: WAG) is leading the charge. Walgreen’s recently announced it was developing a net-zero store in Evanston, Illinois, attempting to promote sustainable retail properties while proving they don’t have to look like the sort of place a Hobbit would live.

Read the rest of this entry »

This ranking comes from Colliers’ 2013 retail report, which analyzes current fundamentals by both market and product type. You can see Colliers’ entire report on this PDF. In its “scorecard” section, you can also find Colliers’ outlook for grocery, restaurant, department store, auto, and hobby companies. Today, let’s look at America’s Top 10 Discount Retailers:

(Parentheses show growth according to each company’s most recent quarterly report)

10.Fred’s Super Dollar (down 2.5%)

9. Kohl’s (1.1%)

8. Walmart (1.5%)

7. Dollar General (1.6%)

6. Sam’s Club (2.7%)

5. DSW (4%)

4. Ross  (6%) Read the rest of this entry »