Commercial Investment Real Estate September/October 2013 - Page 10
Hospitality — Atlanta, New Orleans,
and Houston were among the most active
hotel acquisition markets for the ﬁ rst half of
2013, according to Jones Lang LaSalle. “These
large secondary markets will remain targets for
investors, as their revenue per available room growth
should outpace national averages,” said Art Adler,
Americas CEO of Jones Lang LaSalle’s Hotels & Hos-
pitality Group. As of midyear, U.S. hotel transaction
volume was up 50 percent over 2012 to $8.0 billion,
and Adler predicts a $17.5 billion total by year-end.
Industrial — For the ﬁ rst half of 2013, sales of
industrial properties are up 25 percent YOY, accord-
ing to Cassidy Turley, totaling $13.8 billion in the
ﬁ rst ﬁ ve months of 2013. Most of the sales were
warehouse product, up 42 percent YOY.
Favorite Grocery Stores
A survey of 6,600 consumers reveals where they spend their food dollars. What do
they like most about their favorite grocery store? T e convenient location.
Northeast: Stop N Shop
Source: Chain Store Age
Job Growth Isn’t the Problem
2Q13 of ce absorption ticked up 14.9 msf from 1Q13 and vacancy fell 20 basis points
— clearly upward movement but at a subpar pace, says Kevin T orpe, Cassidy Turley’s
chief economist. However, the economy has created an average of 189,000 jobs per
month since January 2012, above the 2004–07 prerecession pace of 160,000 jobs per
month, so what’s inhibiting of ce space use? Due to telecommuting, open space plans,
and cost-cutting strategies, companies are leasing less space, upending the traditional
ratio of job growth to worker psf.
Retail Cycle, 2013–16
Multifamily — No surprise, cap rate compression
is strongest in the Paciﬁ c regional market, where the
overall apartment cap rate — now at 4.92 percent
— has lost 237 basis points in the past three years,
according to the 2Q13 PwC Real Estate Investor
Survey. Southeast cap rates now average 5.80 per-
cent, down 213 bps since 2010, and Mid-Atlantic
asset cap rates have lost 173 bps in three years,
currently at 5.67 percent.
Ofﬁ ce —
Occupancy gains are small, but wide-
spread: 62 of the 80 markets tracked by Cassidy
Turley increased ofﬁ ce occupancy in 2Q13. And
rent growth is coming — by year-end 2014, 80
percent of major metros should experience rising
ofﬁ ce rents.
— The nation’s second largest retailer,
Kroger, plans to buy the 212-unit Southern-based
upscale grocery chain Harris Teeter for $2.5 billion,
hoping to gain entrée to a class of afﬂ uent shop-
pers as well as counter Walmart’s expansion into the
grocery arena. Kroger will maintain the Harris Teeter
brand as it does with its ﬁ ve other regional chains.
Percentage of retail market in each phase
It’s going to be a long haul for the retail market as it works
through serious oversupply issues in the next three years.
Source: PwC Real Estate Investor Survey, 2Q13
September | October | 2013
Commercial Investment Real Estate