- Top Office Developers Hit the Pause Button on New Projects “Some property developers view periods of economic uncertainty and weak office demand as good times to launch new projects. Because large-scale developments tend to take three to five years or longer, developers bet that tenants looking to trade up in office quality will be drawn to modern offices with lots of amenities, just as the economy is gaining steam. But soaring interest rates and the slow pace at which workers are returning to offices have even some risk-taking developers wary about the future. With office use only about half of what it was before the pandemic, some of the most active developers are postponing major projects and are losing their appetite for new developments.” (The Wall Street Journal)
- Insurers Are Facing a Steep Rise in Reinsurance Rates “Insurers are in the middle of negotiations with reinsurers, which are trying to boost rates by 10% to 30%. Nearly two-thirds of U.S. property-catastrophe coverage renews each Jan. 1, including for many large diversified U.S. and European insurers. It is too soon to know if the reinsurers will get what they want. Carriers might buy less reinsurance to limit the increase in cost, taking on more risk themselves and possibly limiting premium increases they would pass on to their customers. Insurers have already been boosting premium rates on their business, homeowner and auto policies to deal with higher costs due largely to inflation.” (The Wall Street Journal)
- Retail Space Availability Reaches New Low, Retail REITs Enjoy the Competition “Low consumer sentiment, inflation and high interest rates combined spell trouble for retailers and their landlords, but low supply of available retail property has created something of a bright spot, at least for property owners. Although retailers struggled before and during the pandemic, a lack of new development created a growing supply problem in many parts of the U.S. The overall availability rate for retail fell to 5%, according to CBRE's third-quarter market report, the lowest since the firm began tracking that metric in 2005.” (Bisnow)
- Sears Crawls Out of Bankruptcy with 15 Stores to its Name “Sears has emerged from bankruptcy after four years, but the company Americans relied on for decades is essentially dead. Its reorganization plan took effect at the end of last month, ending a process that dragged on for four years, Fox Business reported. Next up for the former retail behemoth is a liquidation of its remaining assets. There ain’t much.” (The Real Deal)
- Apartment Conversions Jumped 25% Over the Past Two Years, Meaning That Swanky Place You’re Renting Likely Used to Be an Office Space, Hotel Room or Church “More than 77,000 apartments are expected to be created out of old and unused buildings in the coming years as the work-from-home boom becomes permanent.” (Insider)
- For Fitness Buffs and Landlords, Gyms Are Hot Again “As people return to in-person activities with the loosening of coronavirus pandemic restrictions and a fall in reported Covid cases from last year, they are making a beeline for the gym, eager to shed extra pounds they gained during lockdowns. And the $32 billion U.S. fitness industry is greeting them with some new tricks. Monthly visits to gyms from March through August rose more than 18 percent from the same period in 2019, according to data from Placer.ai, which tracks retail foot traffic. New memberships also increased, with sales per square foot at gyms up 34 percent in August from a year earlier and almost on a par with 2019, said Mark Sigal, chief executive of Datex Property Solutions, a software company that tracks retail properties.” (The New York Times)
- San Francisco’s Office Woes Serve as Cautionary Tale “The fog around the fate of San Francisco’s office market hasn’t lifted. But the visions coming into focus are far from positive. As an office market slowdown deepens across San Francisco in the back half of 2022, fears of a long-term slump in commercial real estate have calcified, sparking thoughts of further downtown decline. Ongoing challenges from persistently high homelessness and a well-covered spike in crime that led to the June recall of San Francisco’s district attorney haven’t helped, either.” (Commercial Observer)
- PREIT’s CEO on Rebirth of Malls “Over the past three years, malls have strived to regularly reinvent themselves and adjust to new ground rules in order to not only stay alive, but also remain relevant. For Pennsylvania Real Estate Investment Trust, a REIT that owns 18 malls across the East Coast in high barrier-to-entry markets, meeting the changing needs of consumers has been a top priority. Commercial Property Executive reached out to Chairman & CEO Joseph Coradino—who’s been in the retail industry for almost four decades—to talk about the many alterations malls have underwent and how they’ve constantly revived themselves to ride out the storms of the past few years.” (Commercial Property Executive)
- How to Decarbonize Your Real Estate? An Expert Explains “Unsustainable buildings are becoming increasingly undesirable and tough to finance, boosting the demand for new or retrofitted buildings. From large institutional investors to homeowners, there has been a marked shift of interest towards sustainable real estate and the opportunities it presents to capitalize on and future-proof assets. We spoke to Christian Ulbrich, Global CEO and President at JLL, about how to address the existing building stock and turn brown buildings green.” (World Economic Forum)
- NYC’s Area Median Income Jumps 16% as Advocates Call for New Formula “New York City has lagged behind the country's economic recovery from the pandemic-induced recession of 2020, but its federally determined area median income, the figure used to determine who is eligible for affordable housing, registered a 16% jump this year. The new AMI is 34% higher than it was four years ago, a jump that affordable housing advocacy group New York Housing Conference called “wildly out of sync with the modest income increases experienced by renters,” in a new report.” (Bisnow)
- Community-Owned Commercial Real Estate Is Having a Moment “The Kensington Corridor Trust is one of several community-owned or community-led commercial real estate entities at various stages of formation and implementation across the country, and they’re starting to get more notice. Next City has previously covered several, including Oakland’s East Bay Permanent Real Estate Cooperative; the E.G. Woode commercial real estate collective in Chicago; the NorthEast Investment Cooperative in Minneapolis; The Guild in Atlanta; and the East Portland Community Investment Trust. A handful of such community-owned commercial real estate examples just made it into a new report from the Local Initiatives Support Corporation (LISC), ‘Commercial Community Ownership as a Strategy for Just Development.’” (Next City)
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