- The Role of Real Estate Investments in a Portfolio “After the housing crisis, REIT management teams strategically positioned their investment properties with a lower loan/value ratio, which allowed REITs to have more equity to serve as a margin of safety in case of capital market distress, like the coronavirus recession. In fact, REITs’ leverage lending is at a historic low of 28%, as REIT management teams now aim to rely on raising capital rather than debt to fund property acquisitions and development.” (Morningstar)
- Two CRE Signals to Watch This Year “With uncertainty and market readjustments being some clear watchwords for 2023, knowing how and where to pivot becomes both necessary and challenging. A recent Hines report noted that investors, owners, and operators can’t completely rely on what happened in the past because every cycle has its own quirks. ‘Recognizing what is different and what may at least rhyme with previous cycles can provide insight into how to navigate what is both challenging, as it relates to existing holdings, and opportunistic, as it relates to the potential to deploy capital in a more sober and attractive pricing environment,’ the firm wrote.” (GlobeSt.com)
- What the Latest Warehouse Data Is Signaling About Inflation and the Economy “National warehouse storage rates remain elevated, but the prices did not rise quarter over quarter in Q4 2022, according to WarehouseQuote’s just-released Warehouse Pricing Index report. ‘Rates remain at these levels as a result of warehouse inventories not coming down significantly in November and December,’ said Jordan Brunk, chief marketing officer of WarehouseQuote.” (CNBC)
- How Media and Tech Firms Cut Costs by Reducing Real Estate “By the second half of 2022, companies began laying off employees to reduce headcount. To cut costs and bolster balance sheets in preparation for a looming recession, subleasing office spaces became increasingly common. That made sense because rental agreements are a line item companies can easily reduce in a pinch. On average, rental agreements can account for roughly 5% of total operating budgets. Reducing real-estate footprint is also a much more welcome cost-cutting measure than layoffs.” (Variety)
- Starbucks CEO Howard Schultz Is Annoyed Employees Didn’t Listen to His Back-to-Office Request—and Now He’s Ordering a Return “On Wednesday, the coffee company announced that employees that live within commuting distance of its offices would have to go to work three days a week. The policy is to take effect on Jan. 30. Starbucks is asking workers near its corporate headquarters in Seattle to go to the office three days a week: Tuesday, Wednesday and a third day to be decided by individual teams. Employees living near regional headquarters are also expected to commute three times a week, though the company said local managers could decide the best days to bring people back.” (Fortune)
- Apollo Commercial Real Estate Finance Inc. Completes $3.7 Billion of Mortgage Originations in 2022 “Apollo Commercial Real Estate Finance, Inc. (the “Company” or “ARI”) (NYSE:ARI) today announced the Company committed to $243.1 million of mortgages in the fourth quarter of 2022, bringing annual loan originations to $3.7 billion for the year. ‘ARI had a strong year of loan originations, coupled with meaningful achievements in both portfolio and capital management,’ said Stuart Rothstein, Chief Executive Officer and President of ARI. ‘The Company completed over $3.7 billion of new loan originations, many of which were funded by over $2.2 billion in loan repayments.’” (Bakersfield.com)
- As Prices Slip Nationally, NYC Rents Remain Record “December marked the fourth straight month in which rents declined nationally, but landlords in Manhattan continued to hold the line. After peaking at $4,150 in July, the median rent in the borough has bounced between $4,000 and $4,100 ever since, according to reports by appraisal firm Miller Samuel for Douglas Elliman. Last month kept that groove, with the median rent slipping a little over 1 percent from November to $4,048.” (The Real Deal)
- U.S. Convenience Store Count Reverses Four-Year Decline “The number of convenience stores in the United States inched up in 2022. There are 150,174 convenience stores operating in the United States, a 1.5% increase from a year earlier and reversing a four-year decline, according to the 2023 NACS/NielsenIQ Convenience Industry Store Count. Store count increases were recorded in 39 states and Washington, D.C., led by Georgia, which increased by 271 stores.” (Chain Store Age)
- Amazon Opens Logistics-as-a-Service Offering to Leverage Bloated Warehouse Footprint “Amazon has launched a gambit to leverage its vast warehouse empire by selling and delivering products for independent retailers. The online retail giant announced Wednesday that it plans to open its Buy with Prime program to all eligible U.S.-based merchants Jan. 31, after launching in April as an invitation-only program.” (Bisnow)
- New York Lawmaker Proposes State Short-Term Rental Registry “Airbnb has long requested legislation to legitimize its operations across the state, but this is probably not what the rental giant had in mind. State Sen. Michelle Hinchey introduced the Short-Term Rental Registry Act last week, the Times Union reported. The bill would aid municipalities in their efforts to track, regulate and tax short-term rentals. State Sen. Liz Kreuger, a nemesis of Airbnb for years, is co-sponsoring the bill.” (The Real Deal)
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