As the costs of land, labor and construction rise, more developers are focusing on upgrades to existing properties than they are on seeking ground-up developments or value-added centers, executives said at a RECon panel discussion. “It’s been hard to make deals economical if we can’t get the land for free,” said Conor Flynn, CEO of Kimco Realty Corp. “We haven’t been able to go out and find a site and make it work.” So mixed-use has become a big push for the firm, Flynn said. Click to read more at www.icsc.org.
In this issue of Insights, we offer perspectives to capitalize on opportunities that continue to be created in a growing economy, and to maintain a house in order, with preparations made to weather market corrections or flattening economic growth, should those changes occur. Our cover story on office renovations and office amenities samples current building features and services, and discusses why many tenants not only desire, but require, amenity-rich workplaces to support their business strategies. Click to read more at www.transwestern.com.
What begins, must end, one way or another. As loan originators gradually ramped up after the Great Recession, and the packaging of commercial mortgage-backed securities grew apace, so the CMBS sector now faces a wave of maturities from 2020 through 2023 that totals more than $170 billion. According to a new Morningstar research report, the good news is that the on-time payoff rate is likely to remain in the range of 80 to 85 percent. This would be stronger than the payoff rate than during 2015 and 2017, when $222.48 billion in CMBS hit maturity, “because of more selective underwriting standards, rising valuations, and the Fed’s dovish interest-rate outlook amid a slowing economy,” the company says. Click to read more at www.cpexecutive.com.
HOUSTON – The northeast industrial submarket broke records in first quarter 2019, delivering 438,000 sf, with an additional 835,200 sf—the second-largest amount during a quarter—under construction. According to NAI Partners, the market contains 37 million sf of inventory. Vacancies have been gradually rising due in part to new inventory delivering with vacant space. Click to read more at www.recenter.tamu.edu.
The Fortune 500 — Fortune’s annual list of the largest U.S. corporations ranked by total revenue — is out today. And here’s a fun fact: Just 500 companies produced enough revenue last year to equal two-thirds of the entire economic output of the United States. These American businesses sold an astounding $13.7 trillion worth of goods and services, a record sum whether you measure it in nominal dollars or adjusted for inflation. A few interesting facts from this year’s 500:
• Walmart earned the top spot on the Fortune 500 list for the seventh straight year.
• Apple (No. 3) was the 500’s most profitable company for the fifth straight year ($59.5 billion in profits). The company debuted on the list at No. 411 in 1983.
• Amazon.com joined the top five of the Fortune 500 for the first time, with a 31% jump in revenue. And its cloud-software empire helped it notch an annual profit of $10 billion for the first time.
Click to read more at www.fortune.com.
Allan Swaringen, president and CEO of public non-listed REIT (PNLR) JLL Income Property Trust and chairman of Nareit’s PNLR Council, believes a whole new model of PNLRs—the 2.0 version—is emerging to better protect investors’ wealth and generate good income while providing valuable solutions for today’s retirement world. When Swaringen looks out 10 years from now, he can see the eight or 10 PNLRs out there today, with a combined value of $25 billion, expanding to 30 to 40 companies with a value of $300 billion to $400 billion. “The PNLR market, not having shares listed on the exchange and not having our shares traded daily, allows investors a smoother journey and yet still have that good, quality, durable income.” Swaringen added that listed REITs continue to offer far greater liquidity than PNLRs. Swaringen describes the PNLR industry as having undergone some seismic changes over the last five years. JLL Income Property Trust, advised by LaSalle Investment Management, Inc., pioneered the daily-NAV/perpetual life REIT structure six-and-a-half years ago, and was one of the first programs to gain access through a wirehouse distribution platform through a partnership with Merrill Lynch. Click to read more at www.mrej.com.