News.Medill.Northwestern.edu - 2/18/2010
“During the quarter, we continue to execute on our retail improvement plan and anticipate closing a total of 265 stores by the end of 2010. By the end of 2010, outlets will represent about 70 percent of our store base.” (full story)
Friday, February 19, 2010
Thursday, February 18, 2010
Retail Distress Highest Among Unanchored Strips, Bubble Markets
Jan 26, 2010 12:47 PM, By David Bodamer
Distress is rampant in the retail sector, which leads all property sectors with $32 billion in distressed assets, according to New York-based Real Capital Analytics. But not all retail is created equal. A look inside the numbers reveals that unanchored strip centers, retail in regions plagued by high unemployment and deep housing busts, as well as loans originated in 2006 and 2007, are disproportionately more susceptible to distress. Read Full Article
Distress is rampant in the retail sector, which leads all property sectors with $32 billion in distressed assets, according to New York-based Real Capital Analytics. But not all retail is created equal. A look inside the numbers reveals that unanchored strip centers, retail in regions plagued by high unemployment and deep housing busts, as well as loans originated in 2006 and 2007, are disproportionately more susceptible to distress. Read Full Article
Wednesday, February 17, 2010
Tenants Appeal to Lease Auditors for Rent Relief
Feb 16, 2010 3:14 PM, By Denise Kalette, NREI senior associate editor
Cash-strapped commercial real estate tenants are increasingly turning to the services of lease auditors to pare expenses and free up capital for other uses. The auditors are using Web technology to pinpoint potential areas for cost reduction, while keeping in touch with clients via secure Internet sites. Read Full Article
Cash-strapped commercial real estate tenants are increasingly turning to the services of lease auditors to pare expenses and free up capital for other uses. The auditors are using Web technology to pinpoint potential areas for cost reduction, while keeping in touch with clients via secure Internet sites. Read Full Article
Tuesday, February 16, 2010
Home Depot looks to add businesses to its parking lots.
Home Depot, the big-box hardware store, is taking a hard look at those acres of blacktop surrounding their stores – and seeing dollar signs. Read Full Article
Monday, February 15, 2010
Among Buyers, Who Will Step Up?
Feb 15, 2010 10:37 AM, By Ben Johnson, special to NREI from OKCREiew
No single buyer group is leading the charge for commercial property in 2010, but REITs look the best poised to make a significant impact, according to a new report from New York-based researcher Real Capital Analytics (RCA).
The dearth of transaction activity that began in 2008 and carried through much of 2009 finally began to ease in the third quarter and looks to continue into 2010. However, buyers are minus a lead dog to guide the way. The biggest bellwether appears to be the public REITs, which have already committed to acquire as much property so far in 2010 as they did for all of 2009. They’ve also raised an enormous amount of dry powder for the job, an estimated $30 billion.
Across the buying landscape, there does seem to be at least one consistent theme – a frustration at the lack of product. This is most evident when quality assets hit the market. They are quickly bid up by the pool of salivating buyers.
Among buying groups, foreign investors have yet to create a surge in buying activity. Equity funds targeting distressed assets also have raised enough capital to have a serious impact on the market, but their high return expectations are dampening real activity.
According to RCA, prospective investors are increasingly divided between two camps: core and opportunistic, and although they all are looking for bargains, few are finding them.
Core buyers complain that there are few suitable, quality assets on the market and competition for those that are available is steep, pushing pricing to surprisingly strong levels. Opportunistic buyers have been denied the expected tsunami of distressed sales and are now realizing RTC-like returns will be unlikely. Some may have to alter their initial investment strategies or lower their return expectations.
Just 10.8% of all sales in 2009 were associated with distress, but the composition of those buyers differs from non-distressed sales in some meaningful ways, especially within each property type. Overall, players from all sectors, except the public and private REITs, are active in the distressed space. Surprisingly, institutional investors are buying a significantly greater share of distressed sales than of non-distressed, and foreign buyers have been equally active in both arenas. Equity funds have been buying a slightly greater share of distressed than non-distressed properties.
Without decisive moves from REITs, foreign buyers or equity funds, the buyers in the market have largely been private and mostly local. Users, including corporations and governmental and educational entities, have also stepped up to become the second most active buyers of commercial property. As the market recovers, a shift away from private local buyers and users to national and international investors is expected.
No single buyer group is leading the charge for commercial property in 2010, but REITs look the best poised to make a significant impact, according to a new report from New York-based researcher Real Capital Analytics (RCA).
The dearth of transaction activity that began in 2008 and carried through much of 2009 finally began to ease in the third quarter and looks to continue into 2010. However, buyers are minus a lead dog to guide the way. The biggest bellwether appears to be the public REITs, which have already committed to acquire as much property so far in 2010 as they did for all of 2009. They’ve also raised an enormous amount of dry powder for the job, an estimated $30 billion.
Across the buying landscape, there does seem to be at least one consistent theme – a frustration at the lack of product. This is most evident when quality assets hit the market. They are quickly bid up by the pool of salivating buyers.
Among buying groups, foreign investors have yet to create a surge in buying activity. Equity funds targeting distressed assets also have raised enough capital to have a serious impact on the market, but their high return expectations are dampening real activity.
According to RCA, prospective investors are increasingly divided between two camps: core and opportunistic, and although they all are looking for bargains, few are finding them.
Core buyers complain that there are few suitable, quality assets on the market and competition for those that are available is steep, pushing pricing to surprisingly strong levels. Opportunistic buyers have been denied the expected tsunami of distressed sales and are now realizing RTC-like returns will be unlikely. Some may have to alter their initial investment strategies or lower their return expectations.
Just 10.8% of all sales in 2009 were associated with distress, but the composition of those buyers differs from non-distressed sales in some meaningful ways, especially within each property type. Overall, players from all sectors, except the public and private REITs, are active in the distressed space. Surprisingly, institutional investors are buying a significantly greater share of distressed sales than of non-distressed, and foreign buyers have been equally active in both arenas. Equity funds have been buying a slightly greater share of distressed than non-distressed properties.
Without decisive moves from REITs, foreign buyers or equity funds, the buyers in the market have largely been private and mostly local. Users, including corporations and governmental and educational entities, have also stepped up to become the second most active buyers of commercial property. As the market recovers, a shift away from private local buyers and users to national and international investors is expected.
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