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Eight Must Reads for the CRE Industry Today (Feb. 2, 2022)

Retailers and logistics companies are dealing with a warehouse space shortage, reports The New York Times. The Big Picture questions how much rents have gone up over the past year. These are among today’s must reads from around the commercial real estate industry.

  1. Warehouse Space Is the Latest Thing Being Hoarded “As retailers and logistics companies try to stockpile goods to hedge against supply chain problems, they are facing a new challenge: In many parts of the United States, there is little to no space available to stash the merchandise. The shortage of commercial warehouse and industrial space is the latest fallout from pandemic-fueled growth in online shopping and shows few signs of abating.” (The New York Times)
  2. Suburban Sprawl Is Weighing on the U.S. Economy “America’s suburbs are sprawling again. Last year, single family housing starts rose to 1.123 million, the highest since 2006, according to the National Association of Home Builders, however, options for prospective homebuyers remain lean. Experts say the problems of America’s housing market relate to past policy decisions.” (CNBC)
  3. No, Rents Are Not Up 40% “There is no doubt that prices have risen in most places for rents. And, it is worth recalling that a nearly 2-year eviction moratorium just ended. That created a lower turnover in apartments, putting a cap on many rental unit increases. A modest surge in prices would have been expected once that ended, as apartment owners were once again able to raise rentals unit prices to market rates. But that should not lead to high double-digit increases. I suspect Redin’s methodology is amiss; to their credit, they caveat the numbers,1 but even that is another reason to be skeptical of this assessment.” (The Big Picture)
  4. States Are Complicating Corporate Pandemic Planning “Now that the Biden administration’s nationwide coronavirus vaccine mandate for large companies has been overturned by the Supreme Court, employers are left to navigate a thicket of state and local rules. In New York, that means private employers have to require vaccines. In Florida and Texas, laws limit the pandemic protocols they can put in place. And so, the companies that flocked to states like Florida and Texas in search of low taxes and light regulation have found themselves dealing with lots of red tape, at least when it comes to Covid policies.” (The New York Times)
  5. Marina Business Gets Lift from Pandemic Boat Sales “The second-largest owner of U.S. marinas is acquiring the third-largest owner, creating a new powerhouse in this niche real-estate business as boat sales surge during the pandemic. Centerbridge Partners LP said it is paying about $400 million for Westrec Marinas, which the investment firm will absorb into its own Suntex Marinas. That will create a combined company with more than 50 marinas that is valued at $2.5 billion, making it the second-highest-valued U.S. marina owner after Safe Harbor Marinas.” (The Wall Street Journal)
  6. Mall Customers Shop for New Hips or Knees as Surgery Centers Fills Store Vacancies “The Marketplace Mall in Rochester, N.Y., has a food court, arcade games and plenty of fashion boutiques. Soon, it will perform hip replacements and rotator cuff surgeries, too. A closed Sears department store and an adjacent wing of the mall are being reborn as a roughly 350,000-square-foot orthopedic healthcare campus. It will include operating rooms, outpatient facilities and medical and administrative offices.” (The Wall Street Journal)
  7. Instant Delivery Startup Jokr in Talks to Sell New York Operations “Instant-delivery startup Jokr has initiated talks to sell its New York operations, which make up the bulk of its U.S. business, after encountering heavy losses in the city, said three people with direct knowledge of the matter. Jokr has reached out to several rivals, including Philadelphia-based Gopuff, Istanbul-based Getir and California-based FastAF, to discuss a potential sale, the people said. If finalized, a sale of Jokr’s New York operations would mark a rapid retreat from a global expansion plan begun just last year, when the startup launched in more than ten cities across Latin America, Europe and the U.S.” (The Information)
  8. Sales Per Square Foot at PREIT Malls Tops $600 “PREIT CEO Joe Coradino has hit a checkpoint on his mission to establish his properties as the last malls standing in their markets. Nearly a decade ago, Coradino established $500 sales per sq. ft. as the minimum take inside PREIT properties, and he disposed of several malls that fell short. Today the Philadelphia-based company reported that it closed 2021 with average sales per square foot of $603 across its 19 malls.” (Chain Store Age)
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