tag:blogger.com,1999:blog-89309190882865122962024-03-06T12:02:38.757-08:00North Texas Commercial Real EstateNorth Texas Commercial Real EstatePacific Century Realtyhttp://www.blogger.com/profile/09781736636211933016noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-8930919088286512296.post-18146995481183877862018-11-07T20:31:00.001-08:002018-11-07T20:31:28.709-08:00Retail sales continue growth as availability declines across all major segments <div class="MsoNoSpacing">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt;">Retail
and food sales posted a 6.1% year-over-year gain in Q3.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt;">The
power and the lifestyle & mall segments rebounded with positive net
absorption in Q3 after posting negative absorption in Q2. Increased
availability is expected for the lifestyle & mall segment in Q4 due to
Sears’ recent <a href="https://www.cbre.us/research-and-reports/Sears-Bankruptcy-Filing-Details-and-Implications">Chapter
11 filing</a>.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt;">Consumer
sentiment remained historically high despite a small decline from previous
quarters.<o:p></o:p></span></div>
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rates declined across all retail segments, reflecting both buoyant consumer
sales and positive net absorption.<o:p></o:p></span></div>
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asking rent increased slightly in Q3 to a 4.3% year-over-year gain.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt;">Consumer
spending is expected to post healthy growth for the holiday season, driven by
low unemployment and rising incomes from tax cuts.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt;">Source: "</span><span style="font-family: Arial, sans-serif;"><span style="font-size: 13.3333px;">Retail sales continue growth as availability declines across all major segments". <i>CBRE</i>. Q3 2018 U.S. Retail Figures. Web Nov 7, 2018.</span></span></div>
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Pacific Century Realtyhttp://www.blogger.com/profile/09781736636211933016noreply@blogger.com4tag:blogger.com,1999:blog-8930919088286512296.post-77448912004752409162018-11-07T20:27:00.001-08:002018-11-07T20:27:58.491-08:00Commercial Lending: A Second Wind?<div class="MsoNoSpacing">
<span style="font-family: "Arial","sans-serif";">Lending volume, as measured by the CBRE Lending Momentum Index, closed in September well above June’s level. Compared with a year ago, the index is up by 13.1%.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">Despite the trend of higher interest rates and lower loan refinancings, demand for CRE debt remained strong, supported by an increase in sales transactions in Q3.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">The Fed’s additional short-term interest rate hike in September to a target range of 2.0% to 2.25%, along with investors’ concerns over rising inflation and deficits, caused an expansion of the yield curve. Another short-term rate hike by the Fed is likely in December. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">The benchmark 10-year U.S. Treasury settled above 3.2% in early October, approximately 40 basis points (bps) above its close at the end of June. Despite this, credit spreads on seven-to 10-year fixed-rate commercial and multifamily loans held steady. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">After a favorable start to 2018, CMBS issuance slowed by midyear. As of mid-October, year-to-date issuance totaled $63 billion, down from $68.2 billion for the same period in 2017. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">The agency multifamily sector remains stellar. Year-to-date through September, combined Fannie Mae and Freddie Mac multifamily loan purchase volume totaled $90.7 billion, just shy of the record-setting pace of $91.6 billion for the same period in 2017. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">CBRE’s broad loan underwriting measures were slightly more aggressive in Q3. Overall debt service coverage ratios fell slightly, while LTV ratios inched higher. Debt yields and underwritten cap rates fell. In addition, the percentage of loans carrying either partial or full interest-only terms increased to 66.2% from 61.0% in Q2.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">Source: "</span><span style="font-family: Arial, sans-serif;">Commercial Lending: A Second Wind?" <i>CBRE</i>. Q3 2018 U.S. Lending Figures. Web Nov 7, 2018.</span></div>
Pacific Century Realtyhttp://www.blogger.com/profile/09781736636211933016noreply@blogger.com1tag:blogger.com,1999:blog-8930919088286512296.post-32919376630235252912018-11-07T20:20:00.000-08:002018-11-07T20:20:11.838-08:00International buyers boost overall U.S. investment volume<div class="MsoNoSpacing">
<span style="font-family: "Arial","sans-serif";">Commercial real estate investment volume rose 17.4% year-over-year to $152.7 billion in Q3. Total year-to-date investment was $394.2 billion, a sizable increase of 10.6% from the first three quarters of 2017. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">Excluding entity-level transactions, which is a better way to gauge the velocity of transactions, year-to-date investment volume was still up by 5.5% from last year to $351.6 billion and Q3 volume was up by 6.8% year-over-year to $122.8 billion.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">Greater New York, Greater Los Angeles and the San Francisco Bay Area attracted the most investment in Q3, accounting for 24.5% of all acquisitions. The top-15 markets accounted for nearly 61.4% of total Q3 investment volume.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">Industrial, hotel and multifamily cap rates decreased modestly year-over-year in Q3, while office and retail cap rates were essentially unchanged. Industrial cap rates remained lower than office for the fourth consecutive quarter, a new record. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">Pricing for all property types except retail is at an all-time high, with mild deceleration in recent months. Increases in multifamily and office pricing continue to lead the national index, while industrial continues to have decelerating growth. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">Overall, commercial mortgage production year-to-date is slightly softer than in 2017, with combined CMBS and GSE lending down by 3%. CBRE’s Lender Momentum Index is up 13.1% year-over-year. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">Source: "</span><span style="font-family: Arial, sans-serif;">International buyers boost overall U.S. investment volume". <i>CBRE</i>. Q3 2018 U.S. Capital Markets Figures. Web Nov 7, 2018.</span></div>
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Pacific Century Realtyhttp://www.blogger.com/profile/09781736636211933016noreply@blogger.com1tag:blogger.com,1999:blog-8930919088286512296.post-78316032905089038252018-11-01T14:19:00.000-07:002018-11-01T14:19:32.357-07:00Why DFW was named top real estate market to watch in 2019<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBsSCBosl9DloVLBz8mpwKEN3q-Mdc8P1sx4qwQ-H845EjJZILZsMKxc5JggqjXBEXK1p70fJPo_qs9jCkyVqDyvt3gwxmTpa9zL72aGhPOOv5pJqRqfcpCxnUzDFdvEnNBP3NfCEXsFk/s1600/dallas-skyline-long-exposure-11.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1067" data-original-width="1600" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBsSCBosl9DloVLBz8mpwKEN3q-Mdc8P1sx4qwQ-H845EjJZILZsMKxc5JggqjXBEXK1p70fJPo_qs9jCkyVqDyvt3gwxmTpa9zL72aGhPOOv5pJqRqfcpCxnUzDFdvEnNBP3NfCEXsFk/s320/dallas-skyline-long-exposure-11.jpg" width="320" /></a></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">With a relatively low cost of living and population growth projections that outstrip other U.S. cities by two times, Dallas-Fort Worth has been named the top real estate market to watch in 2019.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">The Emerging Trends in Real Estate for 2019 report from PricewaterhouseCoopers and the Urban Land Institute ranked the Metroplex as the number one market for overall real estate prospects in 2019 out of 78 other cities.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">Austin and San Antonio also made it into the top 20 for overall real estate prospects in the annual forecast report, which is compiled from thousands of interviews with real estate experts across a spectrum of industries.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;"><a href="https://www.bizjournals.com/dallas/search/results?q=Mitch%20Roschelle"><span style="color: #1f497d; mso-themecolor: text2;">Mitch Roschelle</span></a>, a partner at PwC, said the economic data points analyzed for the report suggest the strength of the economy and the discipline being practiced in the real estate market.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">“If there is a downturn ahead of us, it won’t be real estate that caused it,” he said. “Right now there's way more discipline in all activities in real estate than there has been in any other time in the modern era. We haven’t gotten ahead of ourselves in terms of real estate development. I hope that real estate folks remain as conservative as they have in creating new supply.”<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">Roschelle said he's seeing that conservative behavior in Dallas-Fort Worth and it has kept the market from getting ahead of itself despite the ever-growing demand and push for growth.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">As for what makes North Texas the one to watch next year, he said several factors come into play.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">“The things that have been important in years past have been markets that have low cost of living and low, relative to the national average, cost of doing business. That’s where companies want to be and that’s where people want to be,” Roschelle said.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">The low cost of living, low cost of doing business and tax efficiency continue to draw people to Dallas-Fort Worth, he said. And so much so that the area’s population growth rate is projected to be more than two times the national average in 2019.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">“The growth in the population is skewed towards younger folks in Dallas,” Roschelle said. “The growth in the 0 to 24 age category is high and in the 25 to 40 category. [The population] is becoming younger, and those people are all the workers for the future.”<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">But as the population in the Metroplex grows, affordable housing is becoming more of an issue. Although affordable single-family homes are a contributor to Dallas-Fort Worth’s success, there aren’t enough of them, according to the report.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">The report says focus group respondents in the Dallas area pointed to an increasingly prevalent “not in my backyard” mentality as the reason for the slow down in available workforce housing.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">“Dallas traditionally was a place where there was a piece of land, and if someone wanted to build on it, they just built on it,” Roschelle said.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">Now, though, developers are often met with a “you’re not building that thing near me” attitude, which tends to add hurdles like cost and time, he said. This contributes to the problem that Dallas-Fort Worth is facing with additions to housing supply not keeping pace with demand.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">What the Dallas area has going for it, though, is a diverse and stable employment base thanks to the wide spectrum of industries represented in the area, Roschelle said. The report indicates that the market is expected to have high growth and low volatility when it comes to employment in 2019.<o:p></o:p></span></div>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">Here are a few things the report says to keep an eye on in 2019:<o:p></o:p></span></div>
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<b><span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">Best bets</span></b><span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;"><o:p></o:p></span></div>
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<li class="MsoNormal" style="color: #1f497d; line-height: normal; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-themecolor: text2; tab-stops: list .5in;"><b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Industrial development investments: </span></b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">With the expansion of the e-commerce industry, industrial facilities, which are seeing historically low vacancy rates, will continue to be in high demand. "Barring a trade war of serious proportions, industrials offer great risk-adjusted returns," according to the report.<o:p></o:p></span></li>
<li class="MsoNormal" style="color: #1f497d; line-height: normal; margin-top: 8.4pt; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-themecolor: text2; tab-stops: list .5in;"><b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Garden apartments:</span></b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";"> "While the multifamily sector registered an overall NCREIF total return of 6.38 percent, the garden apartment component was near a double-digit total return at 9.33 percent," the report says. Appreciation in value is what accounted the over-performance for such properties. And the pricing for garden apartments, or low-rise complexes typically with direct access to outdoor space, reflects a higher-yield 5.7 percent cap rate compared to the 4.9 percent cap rate for mid-to-high-rise properties.<o:p></o:p></span></li>
<li class="MsoNormal" style="color: #1f497d; line-height: normal; margin-top: 8.4pt; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-themecolor: text2; tab-stops: list .5in;"><b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Quick-flip, value-add deals: </span></b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Timing with these deals is key, the report says. They should be executed by 2020 to maximize late-cycle opportunity, "and the geographic focus needs to be in markets where assets have not yet been priced to perfection."<o:p></o:p></span></li>
<li class="MsoNormal" style="color: #1f497d; line-height: normal; margin-top: 8.4pt; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-themecolor: text2; tab-stops: list .5in;"><b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Redeployment of retail properties:</span></b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";"> "Many shopping center properties are just not going to come back as successful retail assets," the report says. But many have a potential for alternative uses like mixed use for properties in close-in suburbs or distribution centers that can capitalize on the e-commerce trend.<o:p></o:p></span></li>
</ul>
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<b><span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;">Issues on the horizon</span></b><span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text2;"><o:p></o:p></span></div>
<ul type="disc">
<li class="MsoNormal" style="color: #1f497d; line-height: normal; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-themecolor: text2; tab-stops: list .5in;"><b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Insurance costs related to increasing natural disasters: </span></b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">The report says the volume of natural disasters in 2018 is evidence that the risk of such catastrophes – "mostly due to climate change" – has been intensifying. Because of this, insurers and reinsurers are experiencing massive payouts and will be pricing this into premiums in the future. "Having adequate coverage and budgeting for increased operating expenses should definitely be high on the list of items that property owners need to watch in 2019," according to the report.<o:p></o:p></span></li>
<li class="MsoNormal" style="color: #1f497d; line-height: normal; margin-top: 8.4pt; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-themecolor: text2; tab-stops: list .5in;"><b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Cybersecurity vulnerabilities: </span></b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Cybersecurity issues that come with increasing interconnectedness have become more and more obvious and have affected many industries including real estate. "One REIT interviewee highlighted a need to establish industry norms and best practices for both primary defense purposes and for evaluating risk/reward parameters stemming from technology," the report says.<o:p></o:p></span></li>
<li class="MsoNormal" style="color: #1f497d; line-height: normal; margin-top: 8.4pt; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-themecolor: text2; tab-stops: list .5in;"><b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Infrastructure: </span></b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Deficiencies in infrastructure are impactful for real estate. The report pulled data from the American Society of Civil Engineers, which shows the multitrillion-dollar shortfalls in investment in key assets and the associated costs that affect businesses. "By 2025, the United States sacrifices $3.9 trillion in GDP and $7 trillion in reduced business sales. Failure to address the issue means 2.5 million fewer jobs created and a shortfall of household income of $3,400 annually," according to the report.<o:p></o:p></span></li>
<li class="MsoNormal" style="color: #1f497d; line-height: normal; margin-top: 8.4pt; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-themecolor: text2; tab-stops: list .5in;"><b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Immigration: </span></b><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">"The draconian approach to border security is a massive self-inflicted wound with immediate negative economic consequences and long-term weakening of our national growth potential," the report says. The impacts on demand growth, the reduction in the baseline for real potential GDP growth and the implications for bringing the country's fertility rate below population replacement level should be reasons for pause, it says.<o:p></o:p></span></li>
</ul>
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<span style="color: #1f497d; font-family: "Arial","sans-serif"; mso-themecolor: text2;"> Source: Ballor, Claire. "Why DFW was named top real estate market to watch in 2019". <i>Dallas Business Journal</i>. Oct 10, 2018. Web Nov 1, 2018.</span></div>
Pacific Century Realtyhttp://www.blogger.com/profile/09781736636211933016noreply@blogger.com1tag:blogger.com,1999:blog-8930919088286512296.post-75275496265158639692018-04-30T22:13:00.000-07:002018-04-30T22:13:34.621-07:00Asian Capital Powers Record Global Growth in Real Estate Investment <div class="MsoNormal">
<img src="https://www.connect.media/wp-content/uploads/2016/08/nat_centrallondon.jpg" /></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">The highest level of real estate investment on record was
achieved in 2017 with a global total of $1.62 trillion (US), compared to $1.43
trillion (US) in 2016, according to Cushman & Wakefield’s “The Global
Investment Atlas 2018” report. The investment climate is anticipated to further
improve in 2018.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">Cushman & Wakefield’s Carlo Barel di Sant’Albano,
says, “Global real estate performed exceptionally well in 2017 with volumes up
sharply and increasing valuations. This has provided good momentum going into
2018, and the balance of pricing, supply and demand all point to a further
healthy year.”<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">Asian investors were the major driving force behind the
record levels of real estate investment, with money from the region accounting
for more than half of all capital deployed, and 46% of all cross-border
activity. What is more, with the range of sources of capital within the region
still increasing, this is likely to signal a period of sustained dominance.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">Global investors from APAC increased their exposure to
most markets, with the U.S. a notable exception. North America’s loss was
Europe’s gain however, as investment from Asian sources grew by 96%
year-over-year, primarily a result of several very large-scale transactions.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><br /></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">Sources: Hutchings, David. "Global Investment Atlas 2018". <i>Cushman & Wakefield</i>. Mar 14, 2018. Web Apr 30, 2018.</span></div>
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Pacific Century Realtyhttp://www.blogger.com/profile/09781736636211933016noreply@blogger.com2tag:blogger.com,1999:blog-8930919088286512296.post-12195773462147379472018-04-30T21:46:00.000-07:002018-04-30T21:46:24.345-07:00U.S. Food Hall Market Expected To Triple By 2020 - Retail<h1 class="yiv9307117052title" id="yui_3_16_0_ym19_1_1525147424579_38941" style="background-color: white; line-height: 1.2141em; margin: 0px 0px 0.5em; max-width: 100%; overflow-x: auto; padding: 0px;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">U.S. Food Hall Market Expected To Triple By 2020</span></h1>
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<span style="font-family: Arial, Helvetica, sans-serif;">Food halls have become the hottest trend in retail, and a new report projects the market will nearly triple in size by 2020. </span></div>
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<img alt="Quarter Market Food Hall Ballston Quarter" class="yiv9307117052" id="yui_3_16_0_ym19_1_1525147424579_38943" src="https://imageserver-bisnow1.netdna-ssl.com/9IpKtQaMP_l821VmwQCKGBQQoJg=/0x0/publisher/5a30401cc6806_16020_BQ_FCW_10a_Qtr_Mkt.jpeg" style="border: 0px; display: block; margin: 0.5em auto; max-width: 100%; min-height: auto; overflow-x: auto;" /></div>
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<span style="max-width: 100%; overflow-x: auto;"><span style="font-family: Arial, Helvetica, sans-serif;">Courtesy of Forest City</span></span></div>
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<span id="yui_3_16_0_ym19_1_1525147424579_38997" style="max-width: 100%; overflow-x: auto;"><span style="font-family: Arial, Helvetica, sans-serif;">A rendering of the Quarter Market food hall in Forest City's Ballston Quarter redevelopment</span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">When <a href="https://www.bisnow.com/tags/cushman-wakefield-2" id="yui_3_16_0_ym19_1_1525147424579_41404" rel="nofollow" style="background: transparent; color: #416ed2; margin: 0px; max-width: 100%; outline: none; overflow-x: auto; padding: 0px;" target="_blank">Cushman & Wakefield</a> first began tracking food halls, open eatery concepts developers across the country are putting into mixed-use projects, in 2015, it found 70 projects across the U.S. </span><span style="font-family: Arial, Helvetica, sans-serif;">That number had grown to 118 by the end of 2017. Based on under-construction and planned projects, the firm's 2018 report projects there will be 180 food halls by year-end and 300 by the end of 2020. </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">That projection represents a conservative estimate, according to Cushman & Wakefield Vice President of Retail Intelligence <a href="https://www.bisnow.com/tags/garrick-brown" rel="nofollow" style="background: transparent; color: #416ed2; margin: 0px; max-width: 100%; outline: none; overflow-x: auto; padding: 0px;" target="_blank">Garrick Brown</a>. Since the report's publication Monday, he has been sent information on at least eight additional projects, and there were some he could not include in the report because owners did not want to make their plans public. </span><span style="font-family: Arial, Helvetica, sans-serif;">"For retail concepts, I can't think of anything that's exploded in growth this way," Brown said. </span></div>
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<img alt="Cushman & Wakefield food hall graph" class="yiv9307117052" id="yui_3_16_0_ym19_1_1525147424579_38946" src="https://imageserver-bisnow1.netdna-ssl.com/_jp8XFhNcJB5-wE45vizv4r2eJg=/0x0/publisher/5accea0e0e5a8_Screen_Shot_2018_04_10_at_12_44_23_PM.png" style="border: 0px; display: block; margin: 0.5em auto; max-width: 100%; min-height: auto; overflow-x: auto;" /></div>
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<span style="max-width: 100%; overflow-x: auto;"><span style="font-family: Arial, Helvetica, sans-serif;">Courtesy: Cushman & Wakefield</span></span></div>
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<span style="max-width: 100%; overflow-x: auto;"><span style="font-family: Arial, Helvetica, sans-serif;">Cushman & Wakefield projects an explosion of new food halls over the next three years.</span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">The trend is driven by a confluence of factors, Brown said, such as the emergence of foodie culture, the headwinds facing other types of retail and the urgency of developers to drive activity to mixed-use projects. </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">"In the past, malls had the view that people were going there for shopping and food was an extra amenity," Brown said. "What we're seeing in the last two to three years is that it's been flipped completely. Shopping center owners are realizing that you've got to do everything you can to get people to your stores, and food brings people out. It has the same draw of retailers, if not greater. There's urgency with developers to get in on the food hall craze."</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">The rise of food halls has also been driven by their own success. Of the more than 100 that have opened, Cushman & Wakefield found just three across the U.S. that have failed. Of the roughly 25 food halls that have opened in Manhattan, not a single one has failed. </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Since they are composed of several small users, the struggling of one concept does not doom the whole project as it might for a new restaurant. And the wide range of users, from food truck operators to celebrity chefs, gives food halls a bevy of options to fill open stands. </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">"Because it's such a small bit of space and startup costs are low, they are very easily replaced," Brown said. "It's a whole different ballgame." </span></div>
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<img alt="Chelsea Market" class="yiv9307117052" id="yui_3_16_0_ym19_1_1525147424579_38949" src="https://imageserver-bisnow1.netdna-ssl.com/WvRcAuq4_DZMFx4uDkzmRzRkZeU=/0x0/publisher/5acced310006d_Screen_Shot_2018_04_10_at_12_57_28_PM_2_.png" style="border: 0px; display: block; margin: 0.5em auto; max-width: 100%; min-height: auto; overflow-x: auto;" /></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Having food halls as an anchor has not only helped drive leasing for other components of mixed-use projects, it has also made properties much more valuable and sought-after for acquisitions. Brown cited <a href="https://www.bisnow.com/tags/google" rel="nofollow" style="background: transparent; color: #416ed2; margin: 0px; max-width: 100%; outline: none; overflow-x: auto; padding: 0px;" target="_blank">Google</a>'s recent <a href="https://www.bisnow.com/new-york/news/capital-markets/google-buys-chelsea-market-jamestown-2b-84639" rel="nofollow" style="background: transparent; color: #416ed2; margin: 0px; max-width: 100%; outline: none; overflow-x: auto; padding: 0px;" target="_blank">$2.4B purchase</a> of Manhattan's 75 Ninth Ave., the building that houses <a href="https://www.bisnow.com/tags/chelsea-market" rel="nofollow" style="background: transparent; color: #416ed2; margin: 0px; max-width: 100%; outline: none; overflow-x: auto; padding: 0px;" target="_blank">Chelsea Market</a>, which he said was a deciding factor in the deal. </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">"Google could have chosen any building in Manhattan," Brown said. "They chose a location their employees are going to love working at. Having that amenity for their employees is outstanding." </span><span style="font-family: Arial, Helvetica, sans-serif;">The food hall movement started in busy downtown locations, but has recently begun to expand to the suburbs, Brown said. </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">"If you're a Class-A mall in a suburban location, it's a perfect fit," Brown said. "One of the things that kept it from the suburbs initially was density, you need considerable foot traffic for these things to be successful. If you're dealing with a mall setting, especially a Class-A mall where foot traffic decline has been the least, that's something that you already have." </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">In the suburbs of Washington, D.C., for example, multiple food halls have recently opened or are underway. Celebrity chef Mike Isabella <a href="https://www.washingtonian.com/2017/12/11/chef-mike-isabella-massive-tysons-corner-galleria-food-hall-is-now-open/" rel="nofollow" style="background: transparent; color: #416ed2; margin: 0px; max-width: 100%; outline: none; overflow-x: auto; padding: 0px;" target="_blank">opened</a> a 41K SF food hall at <a href="https://www.bisnow.com/tags/tysons-galleria" rel="nofollow" style="background: transparent; color: #416ed2; margin: 0px; max-width: 100%; outline: none; overflow-x: auto; padding: 0px;" target="_blank">Tysons Galleria</a> in December, though recent sexual harassment <a href="https://www.washingtonpost.com/business/economy/celebrity-chef-mike-isabella-is-sued-for-extraordinary-sexual-harassment/2018/03/19/4cc47bf4-27a4-11e8-b79d-f3d931db7f68_story.html?utm_term=.d99377cc939e" rel="nofollow" style="background: transparent; color: #416ed2; margin: 0px; max-width: 100%; outline: none; overflow-x: auto; padding: 0px;" target="_blank">allegations</a> against Isabella have created challenges for the concept.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">The National Market food hall at <a href="https://www.bisnow.com/tags/mgm-national-harbor" rel="nofollow" style="background: transparent; color: #416ed2; margin: 0px; max-width: 100%; outline: none; overflow-x: auto; padding: 0px;" target="_blank">MGM National Harbor</a> in Maryland opened <a href="https://www.bisnow.com/washington-dc/news/mixed-use/sneak-peek-inside-mgm-national-harbor-ahead-of-thursdays-grand-opening-68452" rel="nofollow" style="background: transparent; color: #416ed2; margin: 0px; max-width: 100%; outline: none; overflow-x: auto; padding: 0px;" target="_blank">in late 2016</a>, and the 25K SF Quarter Market food hall at <a href="https://www.bisnow.com/tags/forest-city" rel="nofollow" style="background: transparent; color: #416ed2; margin: 0px; max-width: 100%; outline: none; overflow-x: auto; padding: 0px;" target="_blank">Forest City</a>'s redevelopment of the Ballston Common Mall in Arlington, Virginia, is <a href="https://www.bisnow.com/washington-dc/news/retail/forest-city-unveils-dining-options-coming-to-ballston-quarter-food-hall-82632" id="yui_3_16_0_ym19_1_1525147424579_38951" rel="nofollow" style="background: transparent; color: #416ed2; margin: 0px; max-width: 100%; outline: none; overflow-x: auto; padding: 0px;" target="_blank">expected to open</a> in September. </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">As food halls have exploded, Brown said finding quality operators has become a challenge. Landlords often do not want to manage the food halls themselves so they seek out third-party operators to lease the space, but the list of reliable companies is short. </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">"Once you get away from a handful of names, what we're finding is there are a lack of operators that have all of the goods," Brown said. </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">The localized and authentic nature of food hall users makes it difficult for national companies to emerge, but Brown said he is beginning to see large investment groups traversing the country with plans to operate in five to 10 markets. </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">The most common question Brown gets from developers about the rapid rise of food halls is if the concept will become overbuilt. His answer? Of course, but overbuilding will happen market-by-market and no cities are there yet. </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Brown described New York City as in the seventh inning of its food hall growth, while cities like Denver and Miami are in the fifth and Washington D.C. is in the fourth. Others like Phoenix, he said, are still singing the national anthem. The nation's sixth-largest city does not have a single food hall concept, he said. </span><span style="font-family: Arial, Helvetica, sans-serif;">"There is a whole lot of unexplored terrain out there," Brown said. "I don't see this going away any more than I see co-working going away. I think it's here to stay, and it's really in its infancy." </span></div>
Pacific Century Realtyhttp://www.blogger.com/profile/09781736636211933016noreply@blogger.com1tag:blogger.com,1999:blog-8930919088286512296.post-57571218204548266952018-03-12T22:35:00.000-07:002018-03-12T22:35:11.952-07:00Connect Media Presents the Winners of Our 2018 Top Broker Awards<span style="font-family: Arial, Helvetica, sans-serif;"><span style="background-color: white; color: #231f20;">Connect Media presents the winners of our 2018 Top Broker Awards sponsored by </span><a class="yiv5745238618text-text-8" href="https://www.connect.media/hello.php?action=go&pid=fdd7ae24-86e7-4b03-b7a2-98612d453eca&cm=email&cs=mlNational&cn=mlNational,mlTexas,mlCalifornia,mlNewYork,mlChicago-2018-03-12_17:30-Connect_Media_Presents_the_Winners_of_Our_2018_Top_Broker_Awards&ck=006&cc=http://bit.ly/2FDXI4b&ac=buildout-01-banner&where=http://bit.ly/2FDXI4b" rel="nofollow" style="background: rgb(255, 255, 255); color: #4597cb; font-weight: 700; margin: 0px; outline: none; padding: 0px; text-decoration-line: none;" target="_blank" title-off="" title="buildout-01-banner">Buildout</a><span style="background-color: white; color: #231f20;">.</span><br style="background-color: white; color: #231f20;" /><br style="background-color: white; color: #231f20;" /><span style="background-color: white; color: #231f20;">Based on more than 500 nominations received, we recognize 40 leading commercial real estate brokers, or teams of brokers, in property sales and leasing for this honor. Transactions considered included 2017 total dollar volume, total deal square footage and total number of transactions.</span><br style="background-color: white; color: #231f20;" /><br style="background-color: white; color: #231f20;" /><span style="background-color: white; color: #231f20;">We chose 10 National winners, as well as 10 leaders from each of the three areas covered by our regional newsletters: California, Texas and New York. </span><br style="background-color: white; color: #231f20;" /><br style="background-color: white; color: #231f20;" /><span style="background-color: white; color: #231f20;">Thank you to all who submitted and congratulations to this elite group of CRE professionals.</span></span><br />
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<span style="background-color: white; color: #231f20; font-family: Verdana, Geneva, sans-serif; font-size: 16px;"><a href="https://connectconferences.com/top-broker-awards-2018/?utm_source=mlNational&utm_campaign=mlNational,mlTexas,mlCalifornia,mlNewYork,mlChicago-2018-03-12_17:30-Connect_Media_Presents_the_Winners_of_Our_2018_Top_Broker_Awards&utm_medium=email&utm_term=%20&utm_content=Connect_Media_Presents_the_Winners_of_Our_2018_Top_Broker_Awards&pid=fdd7ae24-86e7-4b03-b7a2-98612d453eca" target="_blank">CONGRATULATIONS TO THE WINNERS</a></span><br />
<br />Pacific Century Realtyhttp://www.blogger.com/profile/09781736636211933016noreply@blogger.com0tag:blogger.com,1999:blog-8930919088286512296.post-85672089631899888122017-11-28T08:20:00.000-08:002018-04-30T22:18:12.158-07:007 Key Retail Property Valuation Considerations<div class="separator" style="clear: both; text-align: center;">
<a href="https://imageserver-bisnow1.netdna-ssl.com/w2uOyvr14A_ZhMUS0NiPw3T75tE=/0x0/publisher/59f7f751a46db_alessandro_spataro_355696.jpeg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="545" data-original-width="800" height="435" src="https://imageserver-bisnow1.netdna-ssl.com/w2uOyvr14A_ZhMUS0NiPw3T75tE=/0x0/publisher/59f7f751a46db_alessandro_spataro_355696.jpeg" width="640" /></a></div>
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<span style="font-size: x-small;"><span style="background-color: #f8f9fa; color: #333333; font-family: "trade_gothic_regular" , "arial" , "helvetica" , sans-serif;"><i>Unsplash/Alessandro Sparato</i></span></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">As retail evolves and adapts to a new competitive
landscape, so do the criteria used for assessing property values. Retailers
face new pressure to refine, differentiate and Amazon-proof their business
models, often by combining excitement, digital integration and a high level of
service. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><br />
Here are the top seven factors investors, appraisers and
landlords should weigh when considering existing and potential retail
properties. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><br /><b>
1. Highest And Best Use </b><o:p></o:p></span></div>
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In some cases, a property may no longer be financially feasible to continue
operating as a retail property. A growing number of landlords are realizing
retail may not be their property's maximally productive use,
according to RSM Real Estate Valuation and Advisory Director Kenny Kim. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><br />
Symbolic of this shift is the repurposing of the 676K SF Lord & Taylor
flagship store in Manhattan into WeWork’s new global headquarters, with plans
to convert all but the lower three levels to office. The co-working
giant acquired the iconic property from Hudson’s Bay for $850M. <o:p></o:p></span></div>
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2. Tenant Mix </b><o:p></o:p></span></div>
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Investors historically sought retail properties with traditional anchors like
Macy’s and Nordstrom because they drew a strong consumer base, Kim said.
There were 34 billion visits to U.S. stores in 2010, nearly twice as many
as the 17.6 billion recorded in 2013. <o:p></o:p></span></div>
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Some forward-looking landlords are hoping to attract customers, refresh their
malls and, in some cases, quadruple their rental income, by replacing these
struggling department stores with a number of smaller, experiential
shops. <o:p></o:p></span></div>
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“As investor demand shifts toward malls with more experiential tenants, such as
movie theaters and food and beverage, real estate appraisers or investors need
to have a fresh mindset in how the preferred tenant mix impacts value,” Kim
said. <o:p></o:p></span></div>
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<a href="https://imageserver-bisnow1.netdna-ssl.com/NGZ3LX4_hWvOzDB_rtli21u_LkM=/0x0/publisher/59cd7765ee515_Screen_Shot_2017_09_28_at_6_27_25_PM.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="color: black;"><img border="0" data-original-height="545" data-original-width="800" height="434" src="https://imageserver-bisnow1.netdna-ssl.com/NGZ3LX4_hWvOzDB_rtli21u_LkM=/0x0/publisher/59cd7765ee515_Screen_Shot_2017_09_28_at_6_27_25_PM.png" width="640" /></span></a></div>
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<span style="background-color: #f8f9fa; font-family: "trade_gothic_regular" , "arial" , "helvetica" , sans-serif;"><i>Unsplash/Shravan Vijayabaskaran </i></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><b>3. Retail Category </b><o:p></o:p></span></div>
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According to Kim, some property types, such as lifestyle centers,
entertainment-centric malls and Class-A regional malls may continue to
thrive, while big-box retail may transform into a combination of store and distribution/warehousing
space. <o:p></o:p></span></div>
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“As the integration between online presence and retail stores evolve, so too
will the retail physical spaces,” Kim said. “These changes may have a material
impact on rent and expense levels that drive the valuations.” <o:p></o:p></span></div>
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4. Co-Tenancy And Go-Dark Clauses </b><o:p></o:p></span></div>
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Kim said leases should be examined for co-tenancy and go-dark clauses, which
can dramatically impact the rental income collected. <o:p></o:p></span></div>
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A major tenant’s departure can have a devastating effect on surrounding
retailers’ foot traffic and sales. Co-tenancy clauses protect remaining
retailers by lowering their rents in this instance. But because the
stores’ sales may decline as a result of the overall property occupancy
fluctuations, the rent paid to landlords as a percentage of store sales can
also diminish, Kim said. <o:p></o:p></span></div>
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Depending on the overall health of the mall and its anticipated response to
store closures, future cash flows may be significantly lower and difficult to
estimate. 5. Lease-Up And Downtime Newly developed retail properties may take
longer to lease up vacant space as the uncertain competitive
climate inspires greater caution, according to Kim. Historical
property data and assumptions may no longer be valid forecasting tools.
“Downtime and re-leasing assumptions of vacated space will require
reconsideration,” Kim said. <o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://imageserver-bisnow1.netdna-ssl.com/HjIXhPtbHUzy5MWOVf9jhrZIWoc=/0x0/publisher/59f7f7df25237_tom_sodoge_59677.jpeg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="color: black;"><img border="0" data-original-height="545" data-original-width="800" height="434" src="https://imageserver-bisnow1.netdna-ssl.com/HjIXhPtbHUzy5MWOVf9jhrZIWoc=/0x0/publisher/59f7f7df25237_tom_sodoge_59677.jpeg" width="640" /></span></a></div>
<div style="text-align: right;">
<i style="font-family: trade_gothic_regular, Arial, Helvetica, sans-serif;">Unsplash/Tom Sodoge </i></div>
<span style="background-color: #f8f9fa; font-family: "trade_gothic_regular" , "arial" , "helvetica" , sans-serif;"><br /></span>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><b>6. Tenant Improvement Allowances And Capital
Expenditures </b><o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><br />
Landlords may need to allocate more money for tenant improvement allowances to
incentivize new tenants. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><br />
As ambience becomes increasingly necessary to lure shoppers, additional capital
expenditures may be required to update common areas and building exteriors, Kim
said. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><br /><b>
7. Investment Rates </b><o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><br />
The capitalization and discount rates are key assumption drivers of value in
the discounted cash flow analysis. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><br />
“As e-commerce continues to challenge retail properties, many retail assets
will be in a state of being nonstabilized, and the estimation of the
capitalization and discount rates will require much greater consideration,” Kim
said. “An appraiser or investor will need to evaluate the risk inherent in the
cash flows projected, such as the net operating income growth over the analysis
period, and properly reflect market and execution risk in the investment rates.”<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">Sources: Berkman, Alec. "7 Key Retail Property
Valuation Considerations". Bisnow National. Nov 13, 2017. Web Nov 28,
2017.<o:p></o:p></span></div>
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Pacific Century Realtyhttp://www.blogger.com/profile/09781736636211933016noreply@blogger.com3tag:blogger.com,1999:blog-8930919088286512296.post-66033122150228787512017-11-16T09:56:00.000-08:002017-11-16T09:56:01.521-08:00Outlook 2018: Foreign Investment Remains Strong, Cost To Retain Tenants On The Rise<div style="font-family: open-sans, Helvetica, sans-serif; line-height: 25px; margin-bottom: 15px;">
NEW YORK—<a href="http://www.globest.com/sites/colliers/2017/04/25/transaction-volumes-easing-as-markets-near-peaks/" style="color: #1177dd; text-decoration-line: none; transition: color 0.2s, background-color 0.2s;"><span style="font-weight: 700;">Tenant improvement</span></a> (TI) allowances and free rent are up nationwide and growing at a more rapid pace, and there’s been a significant slowdown in velocity despite ample <span style="font-weight: 700;">capital</span> in the market, <span style="font-weight: 700;">Scott Latham</span>, vice chairman and co-lead for <span style="font-weight: 700;">Colliers International</span>’s New York <span style="font-weight: 700;">capital markets</span> and investment services, and <a href="http://www.globest.com/sites/colliers/2017/04/25/transaction-volumes-easing-as-markets-near-peaks/" style="color: #1177dd; text-decoration-line: none; transition: color 0.2s, background-color 0.2s;"><span style="font-weight: 700;">Andrew Nelson</span></a>, the firm’s chief <span style="font-weight: 700;">economist</span>, tell GlobeSt.com. As 2017 draws to a close, we spoke with Latham and Nelson about current CRE investment trends, both on a national and global level, and the role of rising interest rates in investor strategy for 2018.</div>
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One overarching trend Latham notes is the increasing cost of attracting and retaining tenants. “Tenant improvement allowances and free rent are up about 70% in midtown Manhattan over the last five years, which equates to $65 per square foot in TI allowances and eight months of free rents,” he says. While those are approximations and each transaction is different, it is getting more expensive for landlords to both attract tenants seeking space and retain the tenants they already have.</div>
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From an investment-sales perspective, there has been a real slowdown in transaction velocity, according to Latham. Year-over-year, high-level activity is down 50% in Manhattan and about 19% nationally. “It’s not that there’s any shortage of capital, but there simply hasn’t been a lot of trading activity this year,” he says. In Manhattan, this trend is particularly pronounced because of $160 billion of Manhattan real estate has sold since 2014.</div>
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But that’s not the only reason for the slowdown, says Latham. “Some things happened last year that started to create uncertainty in the minds of investors, and as a result investors started to be more cautious and be a little more cautious.” The first factor was <a href="http://www.globest.com/sites/carrierossenfeld/2017/09/27/are-we-in-the-second-longest-expansion-since-wwii/" style="color: #1177dd; text-decoration-line: none; transition: color 0.2s, background-color 0.2s;"><span style="font-weight: 700;">Brexit</span></a>, and uncertainty over how it would impact the European markets and what it would do to the markets in general. This created a situation where transactional activity slowed in Europe and in the US. Second, the US elections produced uncertainty on the part of real estate owners and investors. That uncertainty has continued because of proposed tax cuts. “They don’t want to transact now if taxes are going to be reduced shortly.”</div>
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The third factor influencing the Manhattan marketplace, in particular, is cap rates, which have started to plateau after a number of years of cap rate compression. “We’ve seen cap rates begin to stabilize, which is not terribly surprising in a mature part of the market cycle,” says Latham. “People stop underwriting growth as they do in the early part of a cycle.”</div>
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While property transaction volumes are continuing to trend down, price appreciation is generally remaining moderate, says Nelson. “This is consistent with our conclusion that we are nearing the end of this real estate market’s cycle.”</div>
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As a whole, the US economy is still viewed as strong and stable, Nelson says, which—combined with ultra-low interest rates—makes US commercial real estate an appealing investment, notwithstanding the Fed’s continued slow push to higher interest rates.</div>
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There is at least one caveat to this rosy picture, however. “Globally, the big news of the summer was China’s announcement that offshore investment will receive greater scrutiny from Beijing, likely reducing direct acquisitions from Chinese entities, particularly for big-dollar properties,” says Nelson. But, he adds, impacts from any Chinese pullback are likely to be relatively limited and focused on a few key markets.</div>
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As foreign investors go, Latham says that in 2016, two of the top 10 most active participants in the entire US sales market were Chinese and one was Canadian, and those three accounted for about 15% of the activity. In the US market this year, there were no Chinese investors in the list of top 10 most-active investors in the market from a dollar perspective. However, there were three foreign buyers in the top 10 this year: the <span style="font-weight: 700;">government of Singapore</span>, <span style="font-weight: 700;">Case</span> (a Canadian company, and historically Canada has been the steadiest foreign capital provider to the US market) and <span style="font-weight: 700;">APG Dutch</span>, a pension fund. Those three foreign buyers account for about 34% of the market activity.</div>
<div style="font-family: open-sans, Helvetica, sans-serif; line-height: 25px; margin-bottom: 15px;">
“We continue to see a large influx of foreign capital in spite of the fact that Chinese capital for the last half of 2017 has been largely absent due to the Chinese government’s focus on capital controls,” says Latham. There has been a lot of foreign activity—this market cycle we have a seen true globalization of the real estate industry—and investors are more comfortable now scouring various markets around the world as they make their investment decisions while factoring in stability, rule of law and other factors as they attempt to balance risk with reward.</div>
<div style="font-family: open-sans, Helvetica, sans-serif; line-height: 25px; margin-bottom: 15px;">
For both foreign and domestic investors, interest rates are playing a role in their strategies, but not an outsized role. Latham says there is an overwhelming sentiment that the rise in interest rates will be slow and moderated by future growth. “Rising interest rates mean we’re in a growing economy,” he says. “This translates to tenants feeling good about the way things are going. ” He says when tenants feel this way, they tend to grow and expand, which are good things for the real estate sector.</div>
<div style="font-family: open-sans, Helvetica, sans-serif; line-height: 25px; margin-bottom: 15px;">
Of course, a rise in interest rates could slightly lower returns, but investors tend to “price in” those interest rates, and higher rates point to a stronger dollar, which bodes well for foreign investors who hedge against it or rise against their own currencies, says Latham.</div>
<div style="font-family: open-sans, Helvetica, sans-serif; line-height: 25px; margin-bottom: 15px;">
Another factor related to the rising interest rate environment is the <span style="font-weight: 700;">refinancing</span> risk for those who have loans coming due. This remains in the borrowers’ favor. “Most real estate deals are either five-year or 10-year money,” says Latham. “Interest rates are now 75 bps less than five years ago and 275 bps less than 10 years ago, and values have appreciated.”</div>
<div style="font-family: open-sans, Helvetica, sans-serif; line-height: 25px; margin-bottom: 15px;">
On balance, the market is very healthy and has done a very good job of maintaining some serious discipline this time around that will prevent the type of correction we saw in the last cycle, where things were out of control, says Latham. “There’s modest leverage, a strengthening economy and currency that will strengthen as rates tick up a bit. Smooth sailing for at least some period of time is expected as the economy continues to improve in the US.”</div>
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Sources: Rossenfeld, Carrie. "Outlook 2018: Foreign Investment Remains Strong, Cost To Retain Tenants On The Rise". <i>GlobeSt.com</i> Nov 1, 2017. Web Nov 16, 2017.</div>
Pacific Century Realtyhttp://www.blogger.com/profile/09781736636211933016noreply@blogger.com0tag:blogger.com,1999:blog-8930919088286512296.post-24307882052010542572017-07-27T10:10:00.001-07:002017-07-27T10:10:34.820-07:00Commercial Bank RBB Bancorp Prepares For IPO<div class="p p1" style="background-color: white; box-sizing: border-box;">
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<span style="font-family: Arial, Helvetica, sans-serif; font-size: small;">Summary</span></h2>
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<span style="font-family: Arial, Helvetica, sans-serif;">RBB Bancorp is set to IPO on Wednesday (7.26) and plans to raise $82.8 million through the offer of 3 million shares at an expected price range of $22-24 per share.</span></div>
<div style="box-sizing: border-box; display: list-item; font-stretch: normal; line-height: 26px; list-style: disc outside none; margin-bottom: 10px;">
<span style="font-family: Arial, Helvetica, sans-serif;">Assuming RBB Bancorp prices at the mid-point of its proposed range, it would command a fully diluted market cap value of $373 million.</span></div>
<div style="box-sizing: border-box; display: list-item; font-stretch: normal; line-height: 26px; list-style: disc outside none; margin-bottom: 10px;">
<span style="font-family: Arial, Helvetica, sans-serif;">We are hearing that there is solid demand for this deal.</span></div>
<div style="box-sizing: border-box; display: list-item; font-stretch: normal; line-height: 26px; list-style: disc outside none; margin-bottom: 10px;">
<span style="font-family: Arial, Helvetica, sans-serif;">We recommend investors buy this IPO.</span></div>
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<strong style="box-sizing: border-box;"><span style="font-family: Arial, Helvetica, sans-serif; font-size: small;">Overview</span></strong></h3>
<div class="p p1" style="box-sizing: border-box; margin-bottom: 15px;">
<span style="font-family: Arial, Helvetica, sans-serif;">LA-based commercial bank, Royal Business Bank (<a class="ticker-link" data_retrieved="0" followers_count="75" href="https://seekingalpha.com/symbol/RBB" style="background-color: transparent; box-sizing: border-box; color: #024999; outline: 0px; text-transform: uppercase;" symbol="RBB">RBB</a>) will make its market debut on Wednesday (7.26) and expects to raise 82.8 million pricing its shares between $22 and $24. The bank is offering 2.1 million shares with 892,000 shares being offered by selling shareholder. The company intends to contribute approximately $25 million of its net proceeds to Royal Business Bank, its wholly-owned banking subsidiary, and to use the rest for general corporate purposes such as growth initiatives like future acquisitions.</span></div>
<div class="p p1" style="box-sizing: border-box; margin-bottom: 15px;">
<span style="font-family: Arial, Helvetica, sans-serif;">Assuming shares price at the mid-point range, RBB Bancorp will have a market cap value of $373 million.</span></div>
<div class="p p1" style="box-sizing: border-box; margin-bottom: 15px;">
<span style="font-family: Arial, Helvetica, sans-serif;">Underwriters for the IPO include: Sandler O'Neill, Keefe Bruyette Woods, Stephens Inc., FIG Partners.</span></div>
<div class="p p1" style="box-sizing: border-box; margin-bottom: 15px;">
<span style="font-family: Arial, Helvetica, sans-serif;">We previewed the deal on our <a href="https://seekingalpha.com/research/114885-don-dion/5014938-three-ipos-set-next-week" style="background-color: transparent; box-sizing: border-box; color: #024999; outline: 0px;">IPO Insights Platform</a>.</span></div>
<h3 class="p p1" style="box-sizing: border-box; color: inherit; line-height: 26px; margin: 0px 0px 15px;">
<strong style="box-sizing: border-box;"><span style="font-family: Arial, Helvetica, sans-serif; font-size: small;">Company Background</span></strong></h3>
<div class="p p1" style="box-sizing: border-box; margin-bottom: 15px;">
<span style="font-family: Arial, Helvetica, sans-serif;">RBB Bancorp was founded in 2008 with the mission of providing commercial banking services to first generation immigrants, initially concentrating on Chinese immigrants, and now, marketing to other Asian ethnicities as well. The bank’s management team has utilized its strong local community ties as well as relationships and credibility with federal and California bank regulatory agencies to build up its client base and operations.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">RBB Bancorp serves all ethnicities. However, its marketing focus was initially on first generation Chinese-Americans who favored working with banks which conducted business in their native languages.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhm49Lluw_xK4UBLBZBKJOAtJIOEIvuav44VZNnGUjg2pFs-NqDZgph9tvVi6OXD5tc6luBag0f-YP27fJXz7DPiphsfi-Q57eLUpK7dpXdJMAXWHkhP9BlB-an9_pRHon8I5mlzPTc3uw/s1600/Royal+Business+Bank.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Arial, Helvetica, sans-serif;"><img border="0" data-original-height="292" data-original-width="668" height="173" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhm49Lluw_xK4UBLBZBKJOAtJIOEIvuav44VZNnGUjg2pFs-NqDZgph9tvVi6OXD5tc6luBag0f-YP27fJXz7DPiphsfi-Q57eLUpK7dpXdJMAXWHkhP9BlB-an9_pRHon8I5mlzPTc3uw/s400/Royal+Business+Bank.png" width="400" /></span></a></div>
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<a href="https://www.royalbusinessbankusa.com/" target="_blank"><span style="font-family: Arial, Helvetica, sans-serif;"><i>(Company Website)</i></span></a></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Source: Dion, Don. "Commercial Bank RBB Bancorp Prepares For IPO". <i>Seeking Alpha.</i> 25 July 2017. Web. 27 July 2017.</span></div>
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Pacific Century Realtyhttp://www.blogger.com/profile/09781736636211933016noreply@blogger.com0tag:blogger.com,1999:blog-8930919088286512296.post-34834024834147859362017-07-27T09:25:00.000-07:002017-07-27T09:25:24.791-07:00More Over Gateway Cities: Why Texas Is Attractive To Foreign Investors<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">Foreign
investors have historically been interested in one type of property: trophy
office assets in the central business districts of gateway cities. But as the
foreign investment climate diversifies and evolves, Texas has come to stand out
as one of the most attractive markets for global dollars. <o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgIMIyWhAcwSIfiphBY6kNdV_hZe9NwbTa0AdPS1f3Nv5dc16wBAc8mN_53nN66uBpwrFSIn6mcFT1_QPuLMn6ndfPp1wOLZ4lrXUDEJPfok-qTc8r13yPUU09SlUET35yhgo7Eji0QggI/s1600/maxresdefault.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="color: black; font-family: Arial, Helvetica, sans-serif;"><img border="0" data-original-height="720" data-original-width="1280" height="360" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgIMIyWhAcwSIfiphBY6kNdV_hZe9NwbTa0AdPS1f3Nv5dc16wBAc8mN_53nN66uBpwrFSIn6mcFT1_QPuLMn6ndfPp1wOLZ4lrXUDEJPfok-qTc8r13yPUU09SlUET35yhgo7Eji0QggI/s640/maxresdefault.jpg" width="640" /></span></a></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><i><br /></i></span></div>
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<span style="color: orange; font-family: Arial, Helvetica, sans-serif; font-size: x-small;"><i>Courtesy: KDC, </i><i>Four CityLine in Richardson, Texas</i></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Texas now
outpaces both California and the U.S. average for foreign investment as a
percentage of total sales volume, according to CoStar. Its increase in direct
foreign investment since the Great Recession is rivaled only by New
York. (CoStar tracks mainly direct and announced joint ventures and does
not typically include fund investments.) <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">“Foreign
investments in Texas have changed, and while I wouldn’t say it’s been a huge
paradigm shift, you should pay attention,” Cushman & Wakefield executive
managing director Beth Lambert said. “As [foreign investors] get more
sophisticated in our country, they tend to spread out from product type and
still need to chase yield. If you’re looking to gather incremental return,
gateway cities are tough to do that.” <o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">Since 2011,
Texas has been behind only New York and California for total new foreign direct
investment projects. Last year, foreign buyer sales volume exceeded $5B in
the Lone Star State, or about 15% of all sales, according to CoStar. That is a
huge leap from 2008 and 2009, when foreign investment accounted for less than
2% of all sales volume in Texas. The tail end of 2016 and Q1 of 2017 saw a
modest decline in Texas, but that seems to represent a blip rather than a
strong negative trend. <o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">More than 50%
of foreign direct investment projects into Texas originated from western
Europe, predominantly the United Kingdom, Germany and France, according to the
Texas Economic Development Corp. <o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgN7JQCC3njhvNi33ine8VWmVijsaeEfxH33Dh1tb7jvKw5ooYGuSDWpmfWzTYixNCQEzZm4a32t9uxXDGWAyw-IbmYwOMWT_LXkaVqu-x8FMVkI-Cq4_E4J_PkxWxdc2DCrKE77vHbjhk/s1600/Foreign+Buyers+in+Texas.jpeg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="color: black; font-family: Arial, Helvetica, sans-serif;"><img border="0" data-original-height="484" data-original-width="710" height="435" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgN7JQCC3njhvNi33ine8VWmVijsaeEfxH33Dh1tb7jvKw5ooYGuSDWpmfWzTYixNCQEzZm4a32t9uxXDGWAyw-IbmYwOMWT_LXkaVqu-x8FMVkI-Cq4_E4J_PkxWxdc2DCrKE77vHbjhk/s640/Foreign+Buyers+in+Texas.jpeg" width="640" /></span></a></div>
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<i><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: orange; font-size: x-small;">Courtesy of CoStar Foreign Buyers in
Texas, California, New York and the U.S. </span><o:p></o:p></span></i></div>
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<i><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></i></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">Different
asset classes, particularly industrial, have become more attractive in recent
years. Industrial’s low cost per SF allows investors to buy more property, CBRE
vice chairman Jack Fraker said. Metros with high concentrations of industrial
assets, including many Texas cities, naturally benefit from more foreign
interest in the asset class. And more recently, a trend of acquiring industrial
portfolios has arisen. <o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">In 2015,
$3.1B of cross-border investment was pumped into the Texas industrial sector
compared to $4.6B of domestic investment, according to Real Capital Analytics.
That $3.1B far exceeds the $156M invested into industrial assets from
cross-border funds in 2016. So far in 2017, foreign investment has pumped $227M
into Texas industrial product. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">“Ten or 15
years ago you started to see industrial portfolios spread across multiple
cities [trading],” Fraker said. As e-commerce and last-mile distribution become
more imperative, industrial portfolios offer opportunities of scale, Fraker
said. <o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">Part of what
makes Texas ripe for global investment is its infrastructure, PPA
Group chief investment officer John Latham said. PPA's value-add
multifamily acquisitions throughout Texas are funded largely from Chinese and
other foreign investors. More direct flights and better highways allow
investors to tour properties before they invest, Latham said.
Plus, high-quality infrastructure makes the industrial markets in Texas
that much more attractive for transporting goods. <o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">“Over the
last 20 years, it’s gotten easier to get to Texas from the coasts. But Texas is
the next logical place,” Latham said. <o:p></o:p></span></div>
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<i><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: orange; font-size: x-small;">Kyle Hagerty, Bisnow, Downtown Houston
skyline </span><o:p></o:p></span></i></div>
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<i><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></i></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">Push factors
can be just as important as pull factors, Latham said. Many countries with high
concentrations of wealth are facing currency valuation issues, overbuilding and
government instability. <o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">“The demand
is driven by what’s going on in their home country besides what’s going on
here. We often look stable comparatively,” he said. <o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">While those
factors do not make Texas more attractive than, say, New York or San Francisco,
the Lone Star State often serves as a next frontier for foreign money looking
to spread itself out into other markets or increase its amount in real
estate holdings. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">“When looking
at risk profile, there’s a natural tendency to diversify, and Texas is a
diverse state in all aspects,” Lambert said. DFW's economy is supported by many
sectors, Houston has strong ports, Austin is blossoming into a major metro, and
San Antonio provides incremental and stable economic growth. <o:p></o:p></span></div>
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<span style="color: orange; font-family: Arial, Helvetica, sans-serif; font-size: x-small;"><i>Margaret Hunt Hill Bridge in Dallas</i></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Institutional
investors, both foreign and domestic, have also increased their percentage of
real estate holdings from about 5% of total equity 10 years ago to double that
today, Fraker said. <o:p></o:p></span></div>
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<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;">As real
estate becomes a larger percentage of total investments, Lambert has seen a lot
more direct investments from foreigners who have opted to drop their local partner.
<o:p></o:p></span></div>
<span style="line-height: 115%;"><span style="font-family: Arial, Helvetica, sans-serif;">The opportunity to
generate positive yields transcends foreign investors specifically. “The demand
for yield is common across most investor groups; that’s not a U.S. phenomenon,”
Transwestern Corporate Properties president Laurie Dotter said. Dotter and
her Transwestern Investment Group team bought State Farm’s campus in Richardson
in a sale-leaseback with Seoul-based Mirae Asset Global Investments last fall.
“We see foreign investors saying, ‘I can comfortably generate good yield here
in Texas,’” Dotter said.</span></span><br />
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<span style="line-height: 115%;"><span style="font-family: Arial, Helvetica, sans-serif;">Source: Bunch, Julia. "More Over Gateway Cities: Why Texas Is Attractive To Foreign Investors". <i>Bisnow Dallas/Fort Worth</i>. 23 May 2017. Web. 27 July 2017.</span>
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<!--[endif]--></span>Pacific Century Realtyhttp://www.blogger.com/profile/09781736636211933016noreply@blogger.com0tag:blogger.com,1999:blog-8930919088286512296.post-14962515819500896822017-07-24T09:56:00.000-07:002017-07-27T09:27:11.551-07:00Sources: Chinese-based home goods retailer readying massive project in Frisco<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjINnx_ZRz8HzNYmj3xU9PwV9-zJ_EdH-8F1vZ9-Lq6B3Txp7e5SRLTuvoL6uKBf1_3f_gN7MdNb2ZHHy5ln22vc7X2_34Jr3atPwPnBgnNK0tpdbUUfn30PZZLeMI3lXxvPD4OHltTBmE/s1600/Frisco_Downtown_Water_tower_05312010.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Arial, Helvetica, sans-serif;"><img border="0" data-original-height="1600" data-original-width="1067" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjINnx_ZRz8HzNYmj3xU9PwV9-zJ_EdH-8F1vZ9-Lq6B3Txp7e5SRLTuvoL6uKBf1_3f_gN7MdNb2ZHHy5ln22vc7X2_34Jr3atPwPnBgnNK0tpdbUUfn30PZZLeMI3lXxvPD4OHltTBmE/s320/Frisco_Downtown_Water_tower_05312010.JPG" width="213" /></span></a></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">A Chinese manufacturer of building materials, hardware and home goods is readying plans to make way for a massive retail hub along the U.S. 380 corridor in Frisco, sources say.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">The real estate rumblings come after an affiliate of Lesso America Inc., a subsidiary of China Lesso Group Holdings Ltd., acquired two tracts of land totaling more than 76 acres in Frisco for a new mall development site in June 2016.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Lesso America President <a href="https://www.bizjournals.com/dallas/search/results?q=Victor%20Lin" style="border-bottom: 1px solid rgba(184, 44, 46, 0.25); border-left-color: rgba(184, 44, 46, 0.25); border-right-color: rgba(184, 44, 46, 0.25); border-top-color: rgba(184, 44, 46, 0.25); box-sizing: border-box; color: #b82c2e; text-decoration-line: none; transition: color 0.1s ease-out, border-color 0.1s ease-out;">Victor Lin</a> did not respond to interview requests. Real estate sources say Lesso America is working on plans to build a multi-story retail center that would be a hybrid between an Ikea and a Home Depot with a focus on serving the growing North Texas suburbs.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">If developed, this could be one of the first Lesso Mall developments to appear in the United States. But other U.S. locations could be in the mix.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">In April, China Lesso acquired an underperforming mall, called Mall at the Source, in Westbury, New York, <a href="http://libn.com/2017/04/25/exclusive-chinese-buyers-acquiring-source-mall/" style="border-bottom: 1px solid rgba(184, 44, 46, 0.25); border-left-color: rgba(184, 44, 46, 0.25); border-right-color: rgba(184, 44, 46, 0.25); border-top-color: rgba(184, 44, 46, 0.25); box-sizing: border-box; color: #b82c2e; text-decoration-line: none; transition: color 0.1s ease-out, border-color 0.1s ease-out;" target="_blank">for a reported $90 million</a>. The company has kept quiet about plans for the East Coast retail property.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Upon Lesso making its foray into Australia with a new store in Sydney, Lin told <em style="box-sizing: border-box;">The Australian</em> this was <a href="http://www.theaustralian.com.au/business/property/chinese-hardware-giant-opens-sydney-complex/news-story/435d785471cffce8c2ca31560f2f1545" style="border-bottom: 1px solid rgba(184, 44, 46, 0.25); border-left-color: rgba(184, 44, 46, 0.25); border-right-color: rgba(184, 44, 46, 0.25); border-top-color: rgba(184, 44, 46, 0.25); box-sizing: border-box; color: #b82c2e; text-decoration-line: none; transition: color 0.1s ease-out, border-color 0.1s ease-out;" target="_blank">part of the company's larger global strategy</a> to diversify its holdings amid challenging conditions in China.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">The new store, called Lesso Home, brings all the Lesso-manufactured products available in other shops throughout Australia under one roof, Lin told the reporter. He also said the company was diversifying its interests amid challenging conditions in China with plans to open more locations in North America, the Middle East and Asia.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Two years ago, China Lesso Group made its move in America, launching its U.S. pipe production in Corona, California.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">DFW's rapidly growing population along the U.S. 380 corridor could make this an ideal launch site for this type of retail concept in Texas, said <a href="https://www.bizjournals.com/dallas/search/results?q=Ken%20Reimer" style="border-bottom: 1px solid rgba(184, 44, 46, 0.25); border-left-color: rgba(184, 44, 46, 0.25); border-right-color: rgba(184, 44, 46, 0.25); border-top-color: rgba(184, 44, 46, 0.25); box-sizing: border-box; color: #b82c2e; text-decoration-line: none; transition: color 0.1s ease-out, border-color 0.1s ease-out;">Ken Reimer</a>, partner and co-founder of Dallas-based Venture Commercial.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">"There's no doubt there's a growing population in this part of the region that could handle a store like this," said Reimer, who works with numerous retailers searching for land sites for storefronts along the corridor.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Reimer, who did not know about Lesso Group's plans, said with few retail competitors along the growing U.S. 380 corridor and a building boom, he could see why a retail company like Lesso would be attracted to the site.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Plus, Frisco has received international attention with its rapid population growth, which has attracted global companies and investors to the city, he added.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">"Collin County and Frisco have done a good job of attracting companies from throughout the world," he added.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">An affiliated entity of China Lesso Group, called Lesso Mall Development (Frisco) Ltd., acquired the land last summer. Officials with the <a data-ct="APT:bbm_profile_link" href="http://companies.bizjournals.com/profile/frisco-edc/264210/" style="border-bottom: 1px solid rgba(184, 44, 46, 0.25); border-left-color: rgba(184, 44, 46, 0.25); border-right-color: rgba(184, 44, 46, 0.25); border-top-color: rgba(184, 44, 46, 0.25); box-sizing: border-box; color: #b82c2e; text-decoration-line: none; transition: color 0.1s ease-out, border-color 0.1s ease-out;">Frisco Economic Development</a> Corp. have declined to comment on the project.</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222; font-family: Arial, Helvetica, sans-serif; font-size: 16.5374px;">Sources: Carlisle, Candace. "</span><span style="color: #222222; font-family: Arial, Helvetica, sans-serif;"><span style="font-size: 16.5374px;">Chinese-based home goods retailer readying massive project in Frisco". <i>Biz Journals</i> 22 July 2017. Web. 24 July 2017.</span></span></span></div>
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