Commercial Real Estate Finance

Posts Tagged ‘CBD’

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 »

Here is another Top 10 based on data compiled and published by Integra Realty Resources in its IRR Viewpoint 2012. Take a look at this ranking of the Top 10 U.S. Office Markets of 2012:

Rankings are based on average price per square foot. 

10. Denver

 9. Dallas

8. Seattle

7. Boston

6. Houston

5. Chicago Read the rest of this entry »

With a title like that, how could this post not go viral?

In a follow-up to our Top 10 Best-Performing Property Types of 2013, here is a ranking of the Top CRE Property Types according to their “Projected Cap Rate Compression” in 2013:

(This ranking is drawn from data published by Integra Realty Resources in its Viewpoint 2013 report. All cap rate changes are for Class A properties.)

10. Airport Lodging (% of properties expected to see cap rate compression in 2013: 33.9%)

9. CBD office (35.0%)

8. Suburban Office (35.0%)

7. Neighborhood Retail (37.1%)

6. Suburban Lodging (38.3%) Read the rest of this entry »

Pop quiz! What do most major cities have in common?

They were all built near a significant body of water–be it a river, lake, or ocean. While modern cities’ commerce and transportation don’t depend on marine traffic the way they did in America’s early days, water still plays a significant role in any city. Rivers and lakes add to the town’s beauty and create opportunity for waterside attractions, marinas, and so on. Waterfronts hold a huge amount of economic potential.

Consider this. If you were looking at two separate apartments, of similar size and quality, in the same geographical area, which one would come with a steeper rent: the one overlooking a river, or the one overlooking the bus depot across the street?

A waterfront can be an enormous driver for demand, rents, and commercial development. Strangely, though, many cities are struggling to take full advantage of such areas. I’m thinking specifically of cities in the Mid-Atlantic.

Read the rest of this entry »

What do kids do for fun today? Certainly not “hang out at the local mall,” based on my recent experience at the Granite Run Mall in suburban Philadelphia. The place was a ghost town.

The declining popularity of shopping malls is not unreasonable. First of all, who wants to park in a lot, walk a few hundred yards to the front door, then walk past 20 stores just to get to The Children’s Place?  Personally, I prefer the efficiency and direct storefront access of a Target (TGT). Read the rest of this entry »

[Today we're excited to feature a guest post about CRE investment in Philadelphia. Many thanks to freelance blogger Emma Crawford for her contribution.]

With the new year in full swing, parts of Philadelphia are proving popular hubs for commercial investment. Specifically, Center City and University City are thriving on recent investments, with a number of proposed or in-process commercial projects in the area, including an updated movie theater, retail centers, and multifamily projects.

Despite past hurdles, Center City has attracted a handful of developers looking to capitalize on its prime location. One major tenant in all of the Center City action has been somewhat surprising. Publishing giant the Philadelphia Media Network, owner of the Inquirer and Daily News, is preparing to fill  a new space right near the Gallery at Market East.

Read the rest of this entry »