BBB Rating|A+

Resource Center

Everything you need to know about commercial real estate investing, real estate crowdfunding and more.
Mogul Minute 06/17/2016
June 17 | 2016

Here at RealtyMogul.com, we keep our finger on the pulse of all things real estate, from finance to technology and everything in between. We make a point of sharing interesting articles and think pieces among RealtyMogul.com staff to help our team stay abreast of the market, and ahead of the curve.

So we thought, why not share some of these insights with you, our partners?

Got A Minute? Here’s some recommended reading with key points from the content:

Office: Flattening Demand Ahead (Globestreet)

  • NAIOP Research Foundation is projecting a decline in net absorption as the outlook for GPD growth continues to remain tepid. The group is projecting 34.6 million SF of absorption for 2016, a number that is far below the 62.1 million SF that was absorbed in 2015. The forecast calls for an increase in 2017 with net absorption ticking up to 46.2 million SF.
  • NAIOP has future economic conditions as “more tenuous in mid-2016 than it has been in recent years. Low energy prices and a declining global economic outlook – due, in part, to European debt crises and a slowing Chinese economy – have finally had a measurable impact on the domestic situation.” The author also mentions declining corporate profits as a measure to watch going forward.
  • It is important to note that “we are not yet forecasting a recession or significant downturn, just a flattening that should cause office demand to level off. Further, since the economy has been growing slowly for the past several years, it is likely that there is not enough overheating for a recession. If one were to occur, chances are it would not last very long or be very deep.”

340 Acres Near LAX Getting Total Overhaul (Curbed)

  • Plans have been approved for a massive mixed use development on the 340 vacant acres to the north of LAX. The plan includes a mix of office space, retail, walk & bike areas, and green space. The plan also calls for a 3-mile pedestrian path that will connect Westchester to Playa Del Rey and the beach.

Day of Reckoning Comes for U.S. Shopping Malls Laden With Debt (National Real Estate Investor)

  • Focus is on the massive amount of debt with mall collateral after General Growth Properties failed to make its $144M loan payment on Detroit’s Lakeside Mall. General Growth Properties is the second largest US mall owner and may be a sign of things to come as the rise of e-commerce and changing demographics have troubled malls throughout the nation. According to Bank of America Merrill Lynch, over $47.5B of loans backed by retail properties are coming due over the next 18 months.
  • Green Street Advisors LLC estimates that several hundred malls could shut down over the next decade. Malls with anchor space to Macy’s, JC Penney, and Sears are seen to be at the highest risk.

The Most Walkable Metros with the Highest Rent Premiums (Multifamily Executive)

  • Measured by what the author calls “walkable urban places” (WalkUps), below is a list of the most walkable Metros in the US. A WalkUp is defined as a development with substantially higher density, mixed-use real estate products, emerging and new product types, and a variety of transportation options:
    • New York (67 WalkUps, 38% of multifamily housing located in WalkUps)
    • Washington, D.C. (44 WalkUps, 23% of multifamily)
    • Boston (54 WalkUps, 31% of multifamily)
    • Chicago (38 WalkUps, 33% of multifamily)
    • San Francisco Bay Area (56 WalkUps, 19% of multifamily)
    • Seattle (25 WalkUps, 17% of multifamily)
  • There is a ton of overlap between walkability and rent premiums commanded in the fourth quarter of 2015. Excluding NYC which ranked first at a 191% rent premium over suburban locations, the other cities that ranked highly were Seattle (97% rent premium), Boston (96%), Chicago (77%), and Miami (74%).
  • Orlando, Las Vegas, San Antonio, and Phoenix rank among the least walkable metros.

Pa., Airbnb reach tax agreement (Philly.com)

  • An interesting development for Airbnb as they have reached an agreement to legalize the service in PA in exchange for a 6% hotel occupancy tax. The tax will be collected by Airbnb initially before being remitted to the state and applies to tenants renting out a house, room, or apt to a guest for less than 30 days. The agreement is expected to generate ~$1M annually for the state’s general fund
Tim Ednoff Headshot
Written by , Associate - Commercial Equity at RealtyMogul.com

Tim evaluates investment opportunities as well as performs due diligence and writes content for various equity and debt transactions. Outside of the office, Tim is an avid sneaker collector, a passionate health and fitness advocate, and a dedicated podcast enthusiast.

 
Did you find this article useful?
Please share your new knowledge.