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Mogul Minute 09/15/2016
September 15 | 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:

Though Deal Volume is Declining, CRE Transactions in All Sectors Still Surpassed $100B in Q2 (Bisnow)

  • As of Q2, deal volume is down 12.7% year-over-year according to a recent report by Ten-X. However, the drop can be somewhat attributed to record volume in 2015 and not a lack of general transaction activity as “four of the five sectors also outperformed their 10-year averages in terms of deal volume, another positive for the industry in the midst of financial and political turbulence.”
  •  As you can see by the chart below, transaction volume dropped from 2015 but still remains elevated from historical figures:

  • The rise in apartment activity is particularly notable as they outperformed their 10-year average by a remarkable 55%. 

GLP Contracts with Hillwood on $1.1B Industrial Portfolio (Connect)

  • The transaction is the largest pure industrial transaction so far in 2016. The portfolio includes 32 assets totaling 15 million square with assets across Chicago, Dallas, Atlanta, PA, LA, Cincinnati, and Indy.

Economy Watch: Leasing Activity Booms for Industrial Sector (Multi-Housing News)

  • More positive fundamentals for the industrial sector from JLL’s most recent U.S. Industrial Investment Outlook report: 
    • Vacancy is at a 16-year low as it “fell by 20 basis points to 6 percent in the second quarter of 2016, with JLL noting that despite an increase in new spec completions, higher pre-leasing rates have helped keep vacancies stable.”
    • “Leasing momentum through the end of 2016 will be driven by robust demand for warehouse and distribution space among retailers, e-commerce and transportation companies.”
    • “Total U.S. industrial product under construction expanded by 7.3 percent in second-quarter 2016 to 193.6 million square feet, compared to 180.4 million in the first quarter.”

US Tech Remains Vibrant, And Provides Resilience to Top Markets (Globe St.)

  • A few interesting blurbs from JLL’s most recent Tech Office Outlook report:
    • “Company researchers studied the office leasing activity in 45 top US metro areas for leases of 20,000 square feet or more, and the data show the technology sector drove nearly 25% of this activity over the past two years. Furthermore, 63% of the tech leases involved expansions, compared to about 48% of leases overall.”
    • While the tech office market has taken a step back in 2016, demand still remains strong. “Tech employment growth continues but this past year has brought people back down to reality; it still outpaces US employment growth by more than two to one after an astronomical four to one in 2014 and 2015.” – Steffen Kammerer, senior vice president of JLL’s technology group.

Six Apartment Markets That Have Recovered the Most Since the Housing Crash (National Real Estate Investor)

  • Although many of these markets were hit extremely hard during the recession, NREI highlights some of the multifamily markets that have recovered most since the housing crash:
    • Las Vegas
    • Phoenix
    • California’s Inland Empire
    • Atlanta
    • Orlando
    • Sacramento

Capital, Shipping Flows Likely to Buoy Development in U.S. Southeast (Urban Land)

  • A few blurbs from the recently held ULI South Carolina capital markets conference:
    • “17 percent of all 2016 transactions involving some foreign capital . . .  International investors also seek the U.S. market because they are “desperate for yield,” during a period in which three countries are offering negative interest rates for bonds up to ten years out.” - Jimmy Hinton, managing director at HFF.
    • “Secondary markets in the United States that have annual population growth in the 4 percent range, including Orlando; Richmond, Virginia; and Austin, should continue to do well” – Jimmy Hinton, managing director at HFF.
    • “Brian Leary, president of commercial and mixed use at Crescent Communities, said that he believes much of the existing office stock in the Southeast will be functionally obsolete if it does not incorporate mixed uses.”

Walgreens May Shutter 1,000 Rite Aid Stores to Complete Merger (Bisnow)

  • In order to receive approval from the FTC for the proposed Walgreens-Rite Aid merge, the number of Walgreens store closings has jumped from 500 to 1,000.
 
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.

 
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