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Even Developers Agree The U.S. Has Way Too Much Retail Space

Even Developers Agree The U.S. Has Way Too Much Retail Space | Real Estate Trends | Scoop.it
The U.S. retail market has too much real estate. The question now is what to do with all the useless space?
Clarence | MSRE, LEED GA's insight:
The oversupply of obsolete retail space and empty boxes presents opportunity for investors/developers to repurpose them to mixed-use or backfill them with relevant tenant mixes to add value.

Although these properties have more "hair on the deal" and are often located in tertiary areas, they can provide an attractive return for those willing to go further out on the risk/reward spectrum.
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How the Supermarket Has Changed in the Last 30 Years

How the Supermarket Has Changed in the Last 30 Years | Real Estate Trends | Scoop.it
Here's how your local supermarket is using the perimeter to market a fresh food revolution.
Clarence | MSRE, LEED GA's insight:
Traditional grocers are facing unprecedented competition from not only big-box/grocery hybrids (Target, Walmart), fresh format stores and dining-out options, but also from delivery services like AmazonFresh and potentially the new Amazon pick-up grocery stores. In order to compete and stay relevant, traditional supermarkets are offering delivery options via Instacart etc., as well as increasing their footprint and shelf space for organic foods, fresh format/prepared foods and in-house restaurants/food bars ("grocerant" offering).
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When It Comes To Multifamily, These Are The Top Buy And Sell Markets

When It Comes To Multifamily, These Are The Top Buy And Sell Markets | Real Estate Trends | Scoop.it
Some of the nation's biggest metros are on Ten-X's "sell" list for multifamily this year.
Clarence | MSRE, LEED GA's insight:
While some multifamily markets have become overheated and likely hit their peak, there are still other markets with attractive potential for higher yields. Ten-X predicts strong forecasted apartment rent growth in tertiary markets like Sacramento and Las Vegas (both took longer to recover from the last recession and are now in the expansion phase of the real estate cycle) as well as larger markets like Atlanta, Phoenix and Dallas with favorable population and job growth.
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Where Renting Trumps Owning

Where Renting Trumps Owning | Real Estate Trends | Scoop.it

"You might take for granted that cities are renter hubs while more rural areas are where the homeowners reside. Considering cities’ limited space and transient career-chasers not looking for the long-term commitment of a home, that’s a fair guess."

Clarence | MSRE, LEED GA's insight:
There are 21 cities with at least 50% renters, and they have varying profiles ranging from college towns to areas near military bases to areas with high home costs.

Investing in apartments near universities and military installations makes sense to capture on-going demand from students, fresh graduates, and military families.

In cities where residents cannot afford to purchase homes, there's also opportunity for multifamily investors since these areas provide a consistent pool of renters.
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Investors Are Targeting Smaller, Last Mile Warehouses

Investors Are Targeting Smaller, Last Mile Warehouses | Real Estate Trends | Scoop.it
Investors target last mile industrial properties as e-commerce pushes for same day delivery.
Clarence | MSRE, LEED GA's insight:
Light industrial buildings have traditionally been sought after by smaller investors, but more recently they have also caught the attention of institutional firms due to their importance as last-mile warehouses in ecommerce. 

Furthermore, with the majority of new industrial construction occurring in the big-box distribution sector & some light industrial buildings being converted to creative office, new supply for the latter has been muted, helping to drive up demand.
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Multifamily Developers Willing to Pay More to Build Near Mass Transit Stops

Multifamily Developers Willing to Pay More to Build Near Mass Transit Stops | Real Estate Trends | Scoop.it
Numerous studies have found that renters pay more to live in apartments near mass transit stops.
Clarence | MSRE, LEED GA's insight:
With ride-sharing apps like Uber helping to bridge the "last mile" gap for train or rail commuters, transit-oriented development (TOD) sites are becoming increasingly popular with renters, helping to drive up values and attract mulitfamily developers.

TOD sites are typically owned by the city, have a formal request for proposal (RFP) process, and often times require more costly mixed-use elements. That being said, other nearby sites a few blocks away from rail stops with less stricter requirements may be more palatable to developers.
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The U.S. Cities That Are Gentrifying the Fastest—You’ll Never Guess No. 1

The U.S. Cities That Are Gentrifying the Fastest—You’ll Never Guess No. 1 | Real Estate Trends | Scoop.it
Gentrification may be a hot-button issue, but it can bring benefits to long-term residents of lower-income neighborhoods—particularly homeowners.
Clarence | MSRE, LEED GA's insight:
As more neighborhoods experience gentrification, it opens up new opportunity for real estate developers, helps drive up property values, and brings new life to neighborhoods. However, in the process, lower-income families get pushed out further from the urban core, which presents a social problem that needs to be addressed by providing new affordable housing units.
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Full-service hotels: High demand, high profits

Full-service hotels: High demand, high profits | Real Estate Trends | Scoop.it
"Limited-service hotels may dominate the development landscape, but existing full-service hotels are here to stay."
Clarence | MSRE, LEED GA's insight:
New full-service hotel supply has been muted because of expensive construction and staffing costs. Although the value per key may be less than select-service hotels in some markets, full-service hotels offset some of these labor costs with revenue from food and beverage (F&B) outlets as well as banquet and meeting spaces. 

With the economy running full steam, conference space demand remains strong for face-to-face meetings in full-service hotels. Additionally, F&B allows full-service hoteliers to capture restaurant and fast casual demand for on-the-go guests. These diversified revenue generators along with high barriers to entry and constrained supply make full-service hotels attractive investments.
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Benefits of modular construction stack up to save time

Benefits of modular construction stack up to save time | Real Estate Trends | Scoop.it
"Developers share the benefits and challenges of modular hotel construction, now in use for hotel projects of all scopes, sizes and locations."
Clarence | MSRE, LEED GA's insight:
Hospitality developers are recognizing the benefits of modular construction, as they help reduce construction costs and time, including allowing them to avoid weather delays in winter months. Challenges include careful planning and design of the modules prior to construction and also finding a place to store the modules before they're craned in, which is more difficult in urban areas.
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The ‘Great Divide’: As Apartment Rents Decline, Suburban Markets Are Leading The Country’s Rent Growth

The ‘Great Divide’: As Apartment Rents Decline, Suburban Markets Are Leading The Country’s Rent Growth | Real Estate Trends | Scoop.it
Yardi Matrix research reveals the 'great divide' in oncoming apartment supply and lower-end demand.
Clarence | MSRE, LEED GA's insight:
Although many working professionals would love to live in the city where they can enjoy a live-work-play environment with no commute, high rents in urban areas are precluding them from doing so. Instead, they're forced to go live further out in the suburbs. Additionally, as older Millennials start families, they want more living space for their money. 

Much of the new construction has been in the cities and rent growth has slowed down in these areas, so this presents value-add multifamily investors opportunity to upgrade Class B/C apartments in the suburbs and charge a nice rent premium. Furthermore, as renters continue to get pushed to the suburbs, it will help fuel sustained demand and rent growth. 
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E-Commerce To The Rescue: Malls Turn To Online Pickup, Drop-Off Locations To Fill Empty Space

E-Commerce To The Rescue: Malls Turn To Online Pickup, Drop-Off Locations To Fill Empty Space | Real Estate Trends | Scoop.it
Online retailers are helping mall owners fill space.
Clarence | MSRE, LEED GA's insight:
Brick-and-mortar stores aren't the only ones adopting omni-channel strategies; online retailers are now opening new pop-up stores in mall spaces to showcase their products experientially to potential customers as well as offer product pick-up/return drop-off options. This is a win-win for mall owners who seek new tenants to backfill spaces vacated by struggling retailers.
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America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis | Real Estate Trends | Scoop.it
Lenders offering energy-conscious loans care little about borrowers’ creditworthiness, contractors function as loan brokers—and investors can’t get enough.
Clarence | MSRE, LEED GA's insight:
PACE financing, which is used by homeowners to purchase energy-efficient solar panels, window insulation and air-conditioning units, reached over $3.4 billion in 2016 and continues to climb. However, unbeknownst to some of these homeowners, if they default on these energy efficient loans, they could face foreclosure since PACE loans are tied to property tax bills and therefore considered an assessment.
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Order-And-Delivery Startup Could Give Mall Retailers A Boost

Order-And-Delivery Startup Could Give Mall Retailers A Boost | Real Estate Trends | Scoop.it
Mall Operators Consider E-Commerce Options To Keep Retailers Open
Clarence | MSRE, LEED GA's insight:
Mall operators, including Simon Property Group, Westfield and General Growth Properties, are now teaming up with startup Deliv to offer customers the option to virtually shop online at all the retail stores within the malls and ship purchased items directly to their homes. This omni-channel strategy hopefully helps mall owners persevere through this competitive retail environment.
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As Middle, Low-Income Californians Migrate To Texas, Class-B Apartments Benefit

As Middle, Low-Income Californians Migrate To Texas, Class-B Apartments Benefit | Real Estate Trends | Scoop.it
The idea that high-earning dual-income families from the California are flooding into Texas has been largely misunderstood, according to the U.S. Census.
Clarence | MSRE, LEED GA's insight:
Texas' business friendly policies, renewed oil boom & competitive job market continue to lure young talent and corporations seeking attractive economic incentives. In addition, middle/lower-class families, including those from California, are migrating to the Lone Star State for its lower cost of living.

This trend presents developers and investors opportunity to capitalize not only in the homebuilding space, but also in value-add, Class-B and C apartments in Texas in order to meet rising housing demand from new residents, including a growing middle/lower class.
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Investors Shift From Equity To Debt As Commercial Valuations Continue To Rise

Investors Shift From Equity To Debt As Commercial Valuations Continue To Rise | Real Estate Trends | Scoop.it
Investors are starting to think it is a better time to be a lender than an owner.
Clarence | MSRE, LEED GA's insight:
As property values have become overheated, more and more institutional real estate investors are starting debt funds to lend in the capital markets. It's a more conservative investment approach since lenders can foreclose on and take back a property if it fails to perform. Debt funds raised $20.4B in 2016, up from $12.2B, an impressive 67% year-over-year increase, indicating strong demand in this space.
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RealPage Bought Rainmakers LRO For $300M

RealPage Bought Rainmakers LRO For $300M | Real Estate Trends | Scoop.it
After acquiring Axiometrics for $75M in cash in January, RealPage has acquired Lease Rent Options from The Rainmaker Group for $300M in cash.
Clarence | MSRE, LEED GA's insight:
RealPage is becoming a powerhouse in the apartment data and forecasting space. After recently acquiring competitor Axiometrics, they have now agreed to purchase Lease Rent Options, which specializes on forecasting availability and demand on the unit type level.
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Instacart delivery service coming to Bradenton area

Instacart delivery service coming to Bradenton area | Real Estate Trends | Scoop.it
Instacart, an online grocery ordering and delivery service, will begin operating in Bradenton, Sarasota, Holmes Beach, Longboat Key, Palmetto and Parrish on Thursday.
Clarence | MSRE, LEED GA's insight:
Demand for grocery-anchored centers has held up as consumers still prefer to pick up fresh groceries at their local store. However, for busy working professionals or older retirees seeking convenience, some are willing to pay for an Instacart membership for the convenience of having their groceries delivered to them from reputable stores such as Publix (FL, GA, NC and TN) and Whole Goods (23 states).

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Fewer Americans Moved Last Year Than At Any Time On Census Bureau Record

Fewer Americans Moved Last Year Than At Any Time On Census Bureau Record | Real Estate Trends | Scoop.it
Fewer Americans are moving today compared to half a century ago.
Clarence | MSRE, LEED GA's insight:
Low unemployment rates and a strong economy coupled with homeownership subsidies, more land-use restrictions and increased use of occupational licensing have resulted in historic low renter and homeowner relocation within the U.S. 

Nevertheless, affordability issues in larger metros and corporate relocations have continued to help spur migration into markets such as Denver, CO, Nashville, TN, Orlando, FL, Madison, WI, Columbus, OH and Minneapolis, MN.
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U.S. Green Building Council Releases Annual Top 10 States for LEED Green Building | U.S. Green Building Council

U.S. Green Building Council Releases Annual Top 10 States for LEED Green Building  | U.S. Green Building Council | Real Estate Trends | Scoop.it
U.S. Green Building Council Releases Annual Top 10 States for LEED Green Building on www.usgbc.org.
Clarence | MSRE, LEED GA's insight:
The U.S. Green Building Council (USGBC) released its 2016 list of top 10 states for LEED-certified square feet per capita. Massachusetts, which improved from third to first place, led the way, followed by Colorado, Illinois, New York and California. Rounding out the list was Nevada, Maryland, Virginia, Washington and Texas.
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Peaking Millennials Could Reverse Urban Market Growth

Peaking Millennials Could Reverse Urban Market Growth | Real Estate Trends | Scoop.it
CRE experts fear aging Millennials could hurt urban market growth.
Clarence | MSRE, LEED GA's insight:
According to a recent research paper by USC professor Dowell Meyers, American cities reached "peak Millennial status" in 2015. Urban apartment demand will slow over the next few years as older millennials are beginning to start families and flock to the suburbs.  JLL research shows that rent growth in urban areas has slowed down already, which supports this forecast. 
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Retail malaise puts pressure on U.S. chains to shutter more stores

Retail malaise puts pressure on U.S. chains to shutter more stores | Real Estate Trends | Scoop.it
New figures suggest more than 10 per cent of U.S. retail space may need to be closed, converted to other uses or renegotiated for lower rent
Clarence | MSRE, LEED GA's insight:
According to research compiled by Clarion Partners, the US has 24 square feet of retail real estate per capita compared to Canada's 16 square feet per person. This brick-and-mortar oversupply along with the rising popularity of ecommerce spending and fast-fashion/discount retailers is forcing traditional retailers to right-size by closing select stores and/or shrimpboxing their store footprints. Vacant retail space will need to be repurposed for mixed-use or leased to more experiential tenants.
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Will the world's next megacity come out of a 3D printer?

Will the world's next megacity come out of a 3D printer? | Real Estate Trends | Scoop.it
Imagine a world where huge cities could be created with the click of a button.
Clarence | MSRE, LEED GA's insight:
As construction costs continue to rise, developers seek ways to reduce their overhead. Dubai-based Cazza has designed the "Minitank", the first 3D printer with the ability to print entire buildings on-site, which will reduce labor and construction costs by 90%. Other competitors have successfully been able to print building components off-site for modular construction, which requires the pieces to be assembled later.

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Five Major Trends That Will Shape Retail Real Estate in 2017

Five Major Trends That Will Shape Retail Real Estate in 2017 | Real Estate Trends | Scoop.it
We took a look at five trends that will drive the retail property sector in 2016, and found that sluggish sales and store closings will continue to challenge retailers.
Clarence | MSRE, LEED GA's insight:
Retail properties, especially regional malls, are facing headwinds including maturing CMBS debt and struggling specialty/department stores with competition from competing e-retailers and fast-fashion/discount retailers. The bright side is that U.S. consumers are wealthy as ever; Class-A malls, lifestyle centers and grocery-anchored retail centers are still very desirable assets; and retailers still want a brick-and-mortar presence for omni-channel strategies. 

Furthermore, struggling malls and power centers are figuring out how to reinvent themselves as traditional anchors are replaced with mixed-use components and/or more experiential and relevant retailers catering to changing consumer tastes. This presents opportunity to value-add/opportunistic investors able to go higher on the risk-reward curve.
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Amazon plans to beef up to 280,000 employees, add 100,000 in next 18 months

Amazon plans to beef up to 280,000 employees, add 100,000 in next 18 months | Real Estate Trends | Scoop.it
Many of the positions are for fulfillment gigs, but tech positions abound too. Amazon joins the trend of corporations touting hiring plans ahead of the Trump Administration.
Clarence | MSRE, LEED GA's insight:
The rising popularity of e-commerce has created strong demand for more fulfillment centers across the U.S. Amazon has benefited from this trend, and is now hiring more than 100,000 new full-time employees to man these centers and also to expand software development for the Amazon Web Services platform.
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Waste Tracking: Now Available to Building Owners and Managers

Waste Tracking: Now Available to Building Owners and Managers | Real Estate Trends | Scoop.it
The EPA’s Energy Star program has added the capability to track waste and material use with the same ease of tracking energy and water use.
Clarence | MSRE, LEED GA's insight:
The EPA's Energy Star program now offers an energy, water and waste "tracking trifecta". By using the new waste tracking component, building owners can now benchmark waste usage and meet waste reduction goals by implementing appropriate waste management/recycling programs, which also help bring in additional miscellaneous revenue for their investment properties.
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