Archive for the ‘Retail’ Category

Entertainment Tenants not Going Away, but still can’t Save Retail

Friday, April 26th, 2013

Retail owners and operators are continuing to look towards entertainment and restaurant tenants to fill spaces left vacant by failing traditional retailers. According to the National Real Estate Investor, the logic behind this is that while traditional retailers may be taken out by the Amazon’s of the world, movie theaters and restaurants are more immune to online competition because they offer an experience that can’t be duplicated online.

While these non-traditional retailers offer more protection from online competitors, landlords should not expect a miraculous recovery. Non-traditional retail is simply not expanding enough to fill the holes of struggling retail centers, and even so, would not move to centers that are beyond saving. It appears that at best, a safe, non-traditional retail tenant can make a mediocre property stronger, and a good property great.

To read the full article from the National Real Estate Investor, click here.

Posted in Big Box, Economy, Malls, Real Property, Retail, Store Chains, Strip Centers | No Comments »

Future of Commercial Real Estate Full of Uncertainty

Monday, April 8th, 2013

Due to the fact that the present day workforce doesn’t need to be near each other to get things accomplished anymore, there seems to be almost nowhere for office and retail demand to go but down. According to The Denver Post, collaboration and purchasing now largely happen in the digital world, where everything you need to know about an organization, person, or product can be found with a few clicks of the mouse.

The problem for commercial real estate moving forward is the fact that due to the easy access allowed by the digital world, rental space is becoming more and more undesirable. Because of the way most commercial real estate leases are structured, if you want office or retail space, you’re going to commit to paying for it for a very long time. For companies who wish to operate lean and remain cautious about the economy, physical space may be too unstable of a commitment to make.

To read the full article from The Denver Post, click here.

Posted in Economy, Office, Real Property, Retail | No Comments »

North Dakota House Approves Bill Requiring Vote Before Tax Breaks

Wednesday, April 3rd, 2013

The North Dakota House has approved a bill that will require voter approval before tax exemptions can be granted to retail sector businesses. According to The Bismarck Tribune, the original state law was intended to allow exemptions for primary businesses, but over the years many smaller cities have approved exemptions for retail sector businesses. The approved bill will only apply to cities with a population under 40,000.

If the Senate backs the house and the bill becomes law, the change would not go into effect until 2014. A city ballot measure under the bill would ask voters one-time whether they want to allow members of the governing body to permit exemptions for retail businesses. A vote would not be conducted on a per project basis.

To read the full article from The Bismarck Tribune, click here.

Posted in Economy, Mid America, Real Property, Retail | No Comments »

Shopping Center Fundamentals Improving at a Painfully Slow Pace

Thursday, March 14th, 2013

The last quarter of 2012 saw a continued snail’s pace towards the recovery of the retail shopping center industry. According to the National Real Estate Investor, improvements in fundamentals were minimal at best, on par with quarterly results exhibited since the retail space market bottomed. These results were expected, however, as demand remains severely depressed despite little new construction. This has caused only incremental improvements in occupancy and rents.

The outlook for the future remains bleak as the economy and job market are not expected to perform much better than they did in 2012. Another reason for pessimism is the effect that the increased payroll tax will have on consumers. While spending up-ticked 0.1% month-over-month in January, much of that was to do with year-end bonuses and a surge in dividends. That figure will likely be a negative percentage in February both month-over-month and year-over-year.

To read the full article from the National Real Estate Investor, click here.

Posted in Economy, Real Property, Retail, Strip Centers | No Comments »

All Commercial Real Estate Sectors Now Slowly Recovering

Monday, February 25th, 2013

Gradual economic improvement and job creation are allowing all sectors of commercial real estate to slowly recover after being hit hard by the recession. According to the National Association of Realtors’ Commercial Real Estate Outlook, the bright spot in the industry continues to be multi-family as pricing for the ten markets in the prime multi-family index have regained pre-recession peak levels due to the high investor interest in the sector.

Outside of multi-family, office, industrial and retail all project a decline in vacancy rates from now until this time next year. Additionally, all are also expecting increases in rents over the same time-frame. The economy as a whole still will remain the deciding factor in whether or not this progression continues. The overall economy is expected to grow 2.5% in 2013, and with modest job creation and assuming there is no fiscal cliff; the demand for commercial space should gradually rise.

To read the full article from AGBeat, click here.

Posted in Economy, Industrial, Multi Family, Office, Real Property, Retail | No Comments »

Upcoming Activity by Several Taxing Jurisdictions in the Southeast

Thursday, February 14th, 2013

A variety of taxing jurisdictions in Georgia, Tennessee and North Carolina have recently announced upcoming activity relevant to values in their respective counties.

The Georgia counties of Fulton, DeKalb and Cobb have indicated recently that they will be increasing assessments on Class A multi-family assets for 2013. Fulton has further indicated that they will be going after Class B multi-family as well. Additionally, Gwinnett County will be targeting increases for large office buildings, high-rise hotels, restaurants, shopping centers with a grocery store anchor, mini-warehouses and some larger warehouses, and any commercial property that recently sold.

In Tennessee, Shelby County has released their capitalization rates for the 2013 revaluation. They will be providing this information to large commercial owners in the next two weeks with notices set to be issued by mid-March. Paradigm has been advised that they will go after increases in Class A apartments, some grocery anchored retail, and selected industrial space over 450,000 square feet. Rutherford County will be targeting office, select retail, and some multifamily, but their revaluation will not occur until 2014. Finally, Davidson County has mentioned a desire to go after office and multi-family, but it will be bracketed by submarket. They may go after additional assets, but they have not yet completed their reviews.

In North Carolina, the listing deadline for Forsyth County has been extended to February 15^th. During their recent reappraisal information sessions, the county laid out the schedule of standards and values to be utilized during this year’s reappraisal. The notices are due to be issued next week and the appeal forms will be included with the notice. Additionally, the county is expected to raise the tax rate by 6.3 cents per $100 due to a projected 8.6% drop in revenues from this year’s reappraisal. This drop is anticipated due to an expected reduction in values for several property types.

For more information on any of these developments, contact Cameron Moore of Paradigm’s Atlanta office at (678) 954-6002 or cmoore@paradigmtax.com.

Posted in Apartments, Eastern, Economy, Hospitality, Hotels, Industrial, Multi Family, Office, Paradigm Info, Real Property, Retail, Strip Centers | No Comments »

Sales Soar for Single-Tenant Retail Buildings

Wednesday, February 6th, 2013

As investors actively seek out real estate that is performing better than bonds, single-tenant retail sales have soared to a six year high. According to Bloomberg, acquisitions of companies that own single-tenant buildings are rising as landlords seek a more diverse mix of renters and lower risk. These triple-net-lease landlords are able to rent to chains under multi-year agreements, with tenants paying property expenses. Such agreements often have rent increases built in over their lifespan.

Total sales for single-tenant retail properties totaled $1.3 billion in the fourth quarter of 2012, the highest such three-month period since the fourth quarter of 2006. Cap rates (net operating income divided by purchase price) for these properties are also the lowest they have been since the second quarter of 2009. Since cap rates tend to decline as prices rise, such low yields are attracting investors due to their high returns compared to corporate bonds.

To read the full article from Bloomberg, click here.

Posted in Economy, Real Property, Retail, Store Chains | No Comments »

Indianapolis Commercial Real Estate Could See a Strong Year

Thursday, January 10th, 2013

Whether commercial real estate in Indianapolis has a breakout year or not depends on Congress and the President settling their differences on federal taxes and the budget. According to INDYSTAR.com, if commercial real estate in Indianapolis is to see any improvements in 2013, a clear outlook on taxes and the budget is critical.

In the office sector, leasing could increase, barring a failure to rein in pending federal tax hikes which could severely dampen business and push vacancies back above 20% in the area. The retail sector has fared very well, outperforming averages across the nation last year, with vacancy rates falling for all types of properties. Industrial space also saw a strong 2012 and looks forward to more of the same in 2013. Users of industrial space increased leasing demand in 2012, dropping the vacancy rate to 3.3%. Additionally, new construction is on the horizon with greatly increased demand from smaller companies.

To read the full article from INDYSTAR.com, click here.

Posted in Economy, Industrial, Mid America, Office, Real Property, Retail | No Comments »

For Fifth Consecutive Quarter, U.S. Malls See Decline in Vacancies

Wednesday, January 9th, 2013

After a year of slight improvements in regional mall vacancies and rents, the trend is likely to continue in 2013. According to Reis Inc, vacancies declined and rents rose in the fourth quarter at large regional U.S. malls, which continued to fare better than smaller strip centers burdened by a weak economy and an oversupply of space. Still, real, substantial improvement will not be seen until the economy and labor market pick up and create demand for more retail space.

The brightest spot of the retail mall industry has been the luxury sector with their more-upscale retailers. The sector continues to boast lower vacancies and command higher rents than malls with more mainstream tenants. The better-than-average fundamentals in the luxury sector have been able to raise the performance of all malls in general.

Posted in Economy, Malls, Real Property, Retail | No Comments »

Dollar Stores are Big Business for Net Lease Investors

Wednesday, December 26th, 2012

As dollar stores continue to pop-up everywhere across the country, they are single-handedly changing the net lease investment market traditionally dominated by drug stores and fast food restaurants. According to the CoStar Group, triple net leased retail outlets have always proven to be popular with investors because of the minimal property management involved (triple net leases typically pass all expenses on to tenants), and the usually longer term leases favored by drug store and fast food users.

As triple net retail properties tend to be very popular, the aggressive expansion of the dollar store industry has also revved up investor interest in the sector as well. Transaction volume still remains the most heavily concentrated in recently constructed properties, but dollar stores located in above average markets with strong demographics remain in high demand no matter when they were constructed.

To read the full article from the CoStar Group, click here.

Posted in Financial Services, Real Property, Retail, Store Chains, Strip Centers | No Comments »

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