Retail Industry Groups Showing Strength

Source: news.investors.com ~ Author: Vincent Mao

After lagging earlier in the year, some retail groups are now hanging tough amid a volatile market.

dollar treeIn Thursday’s IBD, five groups from the retail space were ranked in the top 40 of the 197 industry groups. That’s up from three at the start of the month. While retail stocks have underperformed the market for most of the year, they started to show relative strength in late July.

The Retail-Discount & Variety group ranked No. 8 Thursday, up from No. 13 three weeks prior. The group is rising amid consolidation among dollar stores. In late July, Family Dollar (NYSE:FDO) agreed to merge with Dollar Tree (NASDAQ:DLTR). But Dollar General (NYSE:DG) has tried unsuccessfully to step in and buy Family Dollar. Dollar General has offered a higher bid for Family Dollar.

Five Below (NASDAQ:FIVE), which has the highest Composite Rating in the discount group, is trying to bounce higher this week after falling for four weeks straight. The stock recently entered Sector Leaders, which is IBD’s most demanding stock screen.

The Retail-Restaurants group jumped to No. 15 in Thursday’s edition, up from No. 42 three weeks ago. A number of leading restaurant stocks are covered in the Stock Spotlight column, today on B5.

Chipotle Mexican Grill (NYSE:CMG), one of the highest-rated stocks in the restaurants group, will report second-quarter results Monday.

The Retail-Apparel/Shoes/Accessories group moved up to No. 18 from No. 28. Land’s End (NASDAQ:LE) is staging an upside reversal at its 10-week moving average. The stock is in its first test of the line since breaking out in September. The company was spun off from Sears Holdings (NASDAQ:SHLD) in April.

Burlington Stores (NYSE:BURL) is also in a test of its 10-week line. The stock had a failed breakout from a cup within a larger consolidation in late June, but staged a sharp comeback after that.

Some stocks of mini-markets and supermarkets have rallied amid market weakness.

Pantry (NASDAQ:PTRY) climbed to its best levels in about four years this week after bouncing off its 10-week moving average. It has shown solid accumulation in recent months.

Casey’s General Stores (NASDAQ:CASY) scored a record high early in the week. The stock cleared a 77.68 buy point from a long consolidation Monday in heavy trading.

The Retail-Super/Mini Markets group bolted to No. 32 from No. 68 three weeks before that.

On Wednesday, retailers were dealt some bad news. Retail sales fell by 0.3% in September, according to the Commerce Department. That was the first drop since January. Electronics was a rare bright spot. Strong demand for Apple’s (NASDAQ:AAPL) latest iPhones helped electronic sales to grow 3.4%.

Citing a “tougher sales environment,” Wal-Mart (NYSE:WMT), the world’s largest retailer, trimmed its sales growth forecast to 2% to 3% from about 3% to 5%. Consumer spending is important, as it accounts for two-thirds of economic activity.

If you are in the market to lease, buy or sell commercial property in  Northern California, Realtors associated with Century 21 M&M Commercial is look forward to walking you through the process. Rest assured that Century 21 M&M Commercial Realtors will do their best to make sure that both sides are protected during the transaction.

Job growth results in more office leasing, higher rents

C21_2014_library-5134Source: bizjournals.com ~ Author: Scott Bridges

A rise in employment in Southern California has resulted in the filling of vacant office space, data shows.

Office leasing, considered a lagging indicator of the economy, is up and so are the rents, as entertainment, media and technology companies have lately been moving in as tenants, according to real estate brokerage Cushman & Wakefield, which compiled the office market data.

“We had an amazing third quarter,” Petra Durnin, managing director of research for Cushman & Wakefield, told the Los Angeles Times. “Things are finally looking up.”

“There was a dramatic shift in the third quarter with explosive growth that elevated market fundamentals to an unprecedented level,” according to the firm.

Office vacancy in Southern California — from Los Angeles County to San Diego County — dropped to 15.7 percent in the third quarter, the lowest level since 2008. Meanwhile, new leases have soared 55 percent thus far this year, representing 21 million square feet. During the same period a year ago, just 13.5 million square feet had been leased.

The net gain in occupied office space, called “absorption,” is considered a more precise growth indicator, and during the first three quarters of 2014, the net gain in occupied office space has been 4.2 million square feet — the largest expansion since 2006. The Times reports that by year’s end, gains are expected to rise to their highest post-911 levels.

But there’s still a ways to go.

“There are still a lot of buildings with vacancy,” Russ Cooper, managing director of office landlord Shorenstein Properties, told the newspaper. “Not all boats have been lifted, but it does feel better.”

But here’s some more good news — the Los Angeles Daily News cites a study by the Kyser Center for Economic Research that indicates that job gains in L.A. County next year will finally put the region back at pre-recession employment levels. And that means more office leasing.

If you are in the market to lease, buy or sell commercial property in  Northern California, Realtors associated with Century 21 M&M Commercial is look forward to walking you through the process. Rest assured that Century 21 M&M Commercial Realtors will do their best to make sure that both sides are protected during the transaction.

Rental Rates at Malls Rise; Vacancy Flat

retail commercial

Customers shopped at a newly opened J.C. Penney, the retailer’s first Brooklyn store, in August. Getty Images

Source: online.wsj.com ~ Author: Robbie Whelan

Rental rates at malls and strip shopping centers ticked up slightly in the third quarter, but vacancy rates remained flat as the slow recovery in retail real estate continued to plod along.

Asking rents at regional malls rose 0.5% in the quarter to $40.51 a square foot, up 1.8% from a year earlier, according to data released Thursday by real-estate research company Reis Inc. Mall vacancies remained at 7.9% for the fourth quarter in a row.

Strip centers saw rents rise 0.4% in the quarter to $17.06 a square foot, up 1.8% from a year earlier. Third-quarter vacancy remained unchanged from the previous quarter at 10.3%, slightly lower than the average vacancy rate of 10.74% over the past five years.

The numbers are a sign of continued pain in the retail real estate market. Prices have risen quickly for the highest-quality assets, including the largest, most productive malls and boutique spaces on main thoroughfares in big cities, but they remain sluggish for more run-of-the-mill properties in less attractive locations.

“The last few years have been a tough slog for retail. There’s still a hangover from the recession for consumers,” says Ryan Severino, an economist with Reis.

“It’s left a lot of consumers with a limited ability to spend in a discretionary sense, and that’s reflected in both the slow rent growth and vacancy not really going down,” he adds.

Shopping-center vacancies rose fastest in Chicago (1.4%), Wichita (1.2%) and Tacoma, Wash. (1.2%). They fell fastest in Palm Beach, Fla. (-1.7%), San Jose (-1.2%) and Sacramento (-1.1%).

The pace of construction of new shopping centers is also close to a record low, Reis said. Retail landlords have added 3.99 million square feet of new shopping centers so far this year, including 1.3 million in the third quarter.

The previous low was set in 2010, when builders added 4.5 million square feet over the whole year.

“We used to build about 2,000 shopping centers a year in this country. Now it’s just a few hundred,” said David Henry, the chief executive of Kimco Realty Corp., a shopping-center owner based in New Hyde Park, N.Y.

“Fast casual restaurants like Panera and Chipotle are powering new leases for us,” he added. “We’re smiling again after a couple of tough years since 2009. We’re happy with the fundamentals.”

If you are in the market to lease, buy or sell commercial property in  Northern California, Realtors associated with Century 21 M&M Commercial is look forward to walking you through the process. Rest assured that Century 21 M&M Commercial Realtors will do their best to make sure that both sides are protected during the transaction.

Women in Commercial Real Estate

Source: globest.com ~ Author: Natalie Dolce

Women in Commercial Real Estate

“Many real estate investment management leaders that approach retirement age acknowledge that they have done too little to bring up ‘next generation’ talent to succeed them,” says Price.

SAN FRANCISCO—“Women have made strong progress in advancing to leadership positions in commercial real estate, but our industry still lags many others in attracting women and supporting their career growth.” That is according to COO of Bentall Kennedy USAmy Price. Price was recently named one of sister publication Real Estate Forum’s Women of Influence.

“The commercial real estate industry is only now arriving at the point of creating career paths and defining senior leadership roles that provide the flexibility and opportunities to appeal more broadly to women,” she says. “The gender gap is particularly evident in the real estate investment management sector, where conferences of top executives tend to be 90% composed of men.”

This is not merely a gender issue but a generational one, she adds, as “many REIM leaders approach retirement age, they acknowledge having done too little to bring up ‘next generation’ talent to succeed them. Since women now comprise nearly 60% of university graduates and receive 60% of master’s degrees, there is not just an opportunity but an urgent need for our industry to attract and promote women.”

If you are in the market to lease, buy or sell commercial property in Northern California, Realtors associated with Century 21 M&M Commercial is look forward to walking you through the process. Rest assured that Century 21 M&M Commercial Realtors will do their best to make sure that both sides are protected during the transaction.

10 Must Reads for the Commercial Real Estate Industry Today

10-must-091814

Source: nreionline.com ~ By: 

  • CalPERS picks Ted Eliopoulos to be investment chief “California’s huge pension fund has turned to a trusted insider to take over the daunting job of directing almost $300 billion in investments, crucial to the retirement of more than 1 million current and former state and local government workers. After a nationwide search, the California Public Employees’ Retirement System said Wednesday that it had picked Ted Eliopoulos, a seven-year investment expert at the fund who has been the interim chief investment officer since February.” (Los Angeles Times)
  • The 9 Worst Property Markets In The World “Overall, property prices around the world continue to rise. However, some countries aren’t doing so well. Even the once-hot Chinese housing market has been seeing prices tumble for months. The Global Property Guide has compiled and analyzed the property price performance of the world’s big economies.” (Business Insider)
  • Untangling Nicholas Schorsch’s vast web of businesses “Nicholas Schorsch’s vast web of businesses is untangled in this ‘simple’ visual of all entities under his purview.” (InvestmentNews)
  • City’s Very Unfair Rent Tax “Is it fair that 6,700 retailers and office tenants located in parts of midtown pay a tax, averaging more than $96,000 a year, that identical companies located near the World Trade Center, north of 96th Street or anywhere in the other boroughs do not pay? Welcome to the highly discriminatory world of the city’s commercial rent tax, one of those unique New York taxes that make doing business in the city so difficult.” (Crain’s New York Business)
  • Sears cash burn has suppliers growing leery of Lampert “Eddie Lampert has a big problem with appliances — and it’s not something a Sears repairman can fix. The billionaire chairman of Sears faces mounting pressure for financial assurances from the retailer’s suppliers, even as he seeks shipments of everything from big-ticket appliances to electronics, housewares and clothing, sources told The Post. The suppliers — and the lenders that finance their deliveries — have grown skittish because Sears has burned through nearly $1 billion in the first half of the year.” (The New York Post)
  • Inland American selling 52 hotels for $1.1 billion “Inland American Real Estate Trust Inc., which is in the process of spinning off its hotel business, said today it is selling 52 hotels to a joint venture for about $1.1 billion. The buyers are real estate investment trusts NorthStar Realty Finance Corp. and Chatham Lodging Trust. NorthStar Realty will own 90 percent of the portfolio, while Chatham will own the remaining 10 percent. The deal is expected to close in the fourth quarter of this year.” (Chicago Real Estate Daily)
  • Prometheus Billionaire Emerges With San Francisco Rentals “The apartments at City Square in Cupertino, California, feature an on-site gym and private decks that overlook the property’s amphitheater, Olympic pool and spa. The gray, five-story luxury building, where a second-floor two-bedroom apartment was recently listed for $3,293 a month, is ‘the perfect home after every amazing, exciting, exhausting day’ in the town where Apple Inc. (AAPL) employs 15,000 people and more than 60 other technology companies have offices, according to a listing on Prometheus Real Estate Group’s website.” (Bloomberg)
  • Uniqlo expects profit at U.S. stores in ‘couple of years’ “Japanese fashion retailer Uniqlo aims to turn a profit at its small but expanding U.S. network of stores within the next couple of years, the company’s top U.S. executive, Larry Meyer, said. Well known in its home country for its inexpensive but trendy down jackets, jeans and undergarments, Uniqlo – short for ‘Unique Clothing’ – is a relative newcomer in the United States.” (Reuters)
  • NorthStar Realty Acquires $1.1B Hotel Portfolio from Inland “On the heels of its $4 billion acquisition of Griffin-American Healthcare REIT II last month, NorthStar Realty Finance Corp. announced another blockbuster transaction on Thursday morning: it has entered into a definitive agreement to acquire a $1.1 billion hotel portfolio from Inland American Real Estate Trust. The company is partnering with Chatham Lodging Trust to buy the portfolio in a JV in which it will own a 90% stake and Chatham a 10% minority interest.” (GlobeSt.com)
  • Five Costly Mistakes for Net Lease Owners to Avoid “The idea of managing a triple-net lease property probably doesn’t make sense to a lot of real estate investors. After all, the tenant has 100 percent responsibility for the maintenance of the property, and the owner simply receives a check on the first of the month, right? Management-free ownership may be the case for many triple-net lease properties, but in some situations the fine print of the lease will add a few caveats that the inattentive landlord can stumble over if they are not careful. When confronted with such a lease, an owner needs to be aware of the issues that can hinder their ability to collect the full NOI that is due.” (Commercial Property Executive)

If you are in the market to buy (lease or sell) a commercial property in  Northern California, Commercial Realtors associated with Century 21 M&M Commercial look forward to walking you through the process. Rest assured that Century 21 M&M Commercial Realtors will do their best to make sure that both Buyers and Sellers are protected during the transaction.

Yield-Seeking Investors Venture Into Riskier Secondary CRE Markets – But Will They Stay Out There?

By Randyl Drummer

July 17, 2013

Yield-Seeking Investors Venture Into Riskier Secondary CRE Markets - But Will They Stay Out There?The sale of a small shopping center in Salinas, CA, more than 100 miles south of San Francisco but a world apart from the cosmopolitan Bay Area market, would hardly rank as a bellwether transaction for the U.S. or even the Northern California real estate market.

HFF managing director Nicholas Bicardo, who headed the team representing the seller in the sale of the 93,796-square-foot Boronda Plaza, private REIT Donahue Schriber, described the transaction this way, however: “An excellent opportunity for the buyer to acquire a dominant grocery-anchored retail center located in a secondary market in Northern California at a very attractive yield comparatively to primary markets.”

“Given where spreads are on [capitalization] rates between primary and secondary markets, we are seeing a tremendous amount of capital migrate to similar markets like Salinas in search of higher yields,” Bicardo said.  Read more at costar.com

How to get the most bang for your commercial real estate buck now

By H. Lee Murphy June 24, 2013

After a long, deep freeze, the real estate market is warming up, giving tenants and developers alike the sense that now is the time to do, well, something. The question is—what?

Commercial real estate investors are weighing whether to snap up properties as prices begin to climb. And as more tenants shop for locations, companies evaluating their space needs have to wonder whether now is the time to secure bargains before vacancies evaporate and rents firm up.

Read More…

Cap Rates Decline Amid Slow Commercial Real Estate Recovery

By Carisa Chappell

High demand from investors and low interest rates continue to push down capitalization (cap) rates in the commercial real estate market, according to an analysis from consulting firm PwC.

The report noted that in the second quarter of 2013, the combined overall cap rate fell to 6.91 percent across the 34 United States markets included in the survey conducted by PwC. It marked the 12th consecutive quarter that cap rates have fallen and represented the largest quarterly decline since the end of 2010. The average cap rate during the first quarter of 2013 was 7.08 percent. Read more…

Analysts predict continuing real estate rebounds

Experts continue to show optimism in their predictions for the future of both housing and commercial real estate, according to a nationwide survey released last week.

The study, conducted in March and analyzing 2009 through 2015, showed significant improvement in the predictions of 38 industry economists and analysts for commercial real estate activity when compared to the last survey conducted September 2012. The studies were done by the Urban Land Institute, a nonprofit education and research institute with 30,000 members from all aspects of land use and development, and Ernst & Young, a global company in assurance, tax, transaction and advisory services.

Read More…

Think ‘Sustainable’ as Commercial Real Estate Heats Up

While the past four years have been marked by a consistent lag in the commercial real estate sector, we are beginning to see what looks like a sustainable recovery.  The steady depreciation, partly caused by cross-sector economic woes, has kept pricing down, while at the same time, a burst of growth has companies seeking new or expanded homes.

While many will attempt to play the trend through financing options or through asset purchases, at our firm, my partner Patrick McVeigh and I believe real estate infrastructure investments focused on energy and carbon efficiency represent a better, less obvious, and more powerful growth opportunity. There are two main rationales guiding this direction: