Hortense Leon is a freelance writer based in Miami. She has been a business journalist for nearly 30 years and has been covering the commercial real estate market for 20 of those years. She started her career in journalism as a fact-checker at Playboy magazine in Chicago in the 1970s, where her assignments ran the gamut from checking Playboy of the Month bios to verifying information in the famous Jimmy Carter interview of 1976.
More recently, her work has appeared in National Real Estate Investor, Retail Traffic, REALTOR and Real Estate Forum magazines, among other media. In 2010, she was editor for the Southeast at Globest.com and is a regular contributor to Mortgage Banking magazine. She holds a B.A in English literature from Indiana University.
The overall value of U.S. properties owned by real estate investment trusts has returned to peak 2007 levels, according to the latest report by Green Street Advisors. The aggregate CPPI for REITs is now 100.4 percent of August 2007 levels.
More than 1.2 million square feet of speculative industrial space is in development in Miami-Dade County, after several years of virtually no new industrial construction in the county. Although still low, the market is on the mend, analysts say.
Expectations for the U.S. commercial real estate market are much more optimistic than even six months ago, according to a survey by the Urban Land Institute (ULI). Commercial real estate transaction volume in 2013 will likely reach $310 billion.
The number of hotels sold in the U.S. was up 41 percent year-over-year in the first two months of the 2013, according to Real Capital Analytics' latest hotel trends report. The largest increases were in portfolio sales, the firm reports.
The office sector led U.S. commercial property defaults in 2012 for the second year in a row, according to a new study by Fitch Ratings. Nevertheless, the volume and value of office loans in default were down significantly from 2011.
Mayor Bloomberg take note! For all of your good intentions--and money spent to fight King Sugar--fast food is the retail category with the most planned openings in the U.S. this year. Subway, Quiznos, Five Guys Burgers and Fries, Papa John's and Dunkin' Donuts are all planning outlets.
The resurgence of rail in the United States has helped turn around the industrial market in California's Inland Empire, one of the area's hardest hit by the real estate collapse. In the last two years, the Riverside/San Bernardino market has produced the largest growth.
Although farmland may not sound like a sexy investment, it has performed better than most other asset classes in the last couple of years. Prices have risen so high that Jeffrey Havsy, director of research at the National Council of Real Estate Investment Fiduciaries (NCREIF) in Chicago says that there is potential for a bubble.
Houston's retail market is growing stronger and more diverse, after a relatively quiet period following the financial crisis of five years ago. The U.S.'s fourth largest city didn't face a glut of retail space when the music stopped in 2008, like many other metropolitan areas.
As sales volumes continue to grow, the supply of Class A multi-family properties in South Florida is dwindling, causing some investors to change their buying habits. Bidding on Class A apartment properties is so competitive, some buyers are looking at deals on lesser-quality apartment buildings, industry experts say.
Manhattan office leasing levels improved in February, led by a 45 percent increase in activity in the downtown area compared to January, according to CB Richard Ellis' latest Manhattan Marketview Snapshot.
Commercial mortgage-backed delinquencies continue to decline in the U.S., reaching a three-year low at the end of February, according to Fitch. Two large loan modifications helped push delinquencies lower for the ninth straight month, the ratings service reports.
It isn't often that the sale of an industrial property makes headlines. But that was the case with the Solyndra manufacturing facility in Fremont, California. The sale of the controversial Solyndra facility to Seagate Technology, LLC for $90.3 million, or $219 per square foot, was the largest individual industrial real estate sale in the U.S. in January, according to Real Capital Analytics' U.S. Capital Trends Industrial report for the month.
Although the sales volume of U.S. hotels in January was up a headline-grabbing 87 percent over the previous January, the numbers don't necessarily reflect overall investor interest in the market. The $1.6 billion in sales tracked by Real Capital Analytics represented several large transactions, including the sale of the Atlanta Marriott Marquis to the Abu Dhabi Investment Authority for $293 million, or $176,000 per key.
There is a massive amount of capital today looking to buy commercial real estate, says Dan Fasulo, managing director at Real Capital Analytics. This appetite is partially generated by the policy of the US Federal Reserve, which is forcing capital into the property markets by keeping interest rates low, he says. "When you have an investment property with 6% to 8% unlevered returns, which means that, with leverage, the returns could be in the double digits," that makes commercial real estate attractive to a lot of investors, says Fasulo.
The $85 billion chunk that will likely be extracted from the US federal budget, and therefore the US economy, during the process of sequestration-- slated to begin on March 1--will be a blow to US commercial real estate. Because the federal government is omnipresent--as an office tenant, as a builder of roads, bridges, military facilities, prisons and even offices--the revenue that the federal government contributes to the commercial real estate economy will be missed.
Senior commercial real estate executives' are feeling relatively positive about current and future conditions in the commercial real estate market, according to a first quarter 2013 Sentiment Index put out by the Real Estate Roundtable. But these upbeat sentiments relate mostly to commercial real estate in so-called Gateway markets, where valuations, equity and capital availability are recovering more quickly, particularly for Class A assets, than for B and C properties in secondary and tertiary markets.
For the Washington, D.C metro apartment market, 2012 was a good year, but the outlook for 2013 and beyond may be affected by some troubling trends, not to mention the drama unfolding within the federal government. As of December 2012, the Class A stabilized vacancy rate for the Washington metro apartment market was a mere 4.2%, down from 5.0% the year before, according to a 2012 year-end Mid-Atlantic Class A apartment market report put out by Alexandria, Virginia-based Delta Associates.
The industrial real estate market is making a comeback. Net demand for warehouse space was 40.8 million square feet in fourth quarter 2012, making it the second strongest quarter since record-keeping began in 1993 at Cassidy Turley, a commercial real estate company with offices around the US.
A plan for a 33-acre development--- including hotels, meeting space, office space and restaurants-- known as Airport City at MIA--is not unlike other developments in and near airports in the US and around the world known as "aerotropolises." These mini-cities are similar in form and function to traditional metropolises, but center around airports, rather than central cities.
Sign up for World Property Journal updates, information and news alerts