Q42013: Cap rates for single tenant net leased office/retail markets reached their lowest levels in a decade. The Boulder Group published their quarterly “Net Lease Market Report” which shows cap rates for office/retail markets hit below 7% while industrial cap rates increased to 8.15% for an increase of 15 basis points. Read the report – which also includes a survey of 2014 cap rate expectations - here.
NREI releases 2013’s “Top Ten Moments of Commercial Real Estate.” Highlights include:
- March 4th: FHFA announces plan to reduce Fannie Mae and Freddie Mac’s new multifamily business.
- May 10th: The final component of One World Trade’s Spire is installed.
- June 11th: Glenn Rufrano resigns as CEO of Cushman & Wakefield.
- June 20th: Federal Reserve Chairman Ben Bernanke announces the Fed will begin tapering bond purchases.
- August 20th: Bill Ackman announces that Pershing Square Capital has backed off investing in retail companies.
- October 15th: Ivanhoe Cambridge buys 50% stake in 211 6th Ave in NYC.
- October 23rd: American Realty Capital reaches agreement to buy Cole Real Estate Investments for $6.85 billion.
- November 5th: Blackstone brings first single-family housing rental securitization to market.
- November 27th: UBS fund buys half of Water Tower Place, the largest single asset retail deal of the year.
- December 13th: Hilton (and Blackstone Group) raises $2.3 billion in its IPO.
Read the full article here.
Is “Big Data” a short real estate trend? Not likely. Some of the largest real estate corporations are investing in data, research and analysis in 2014. Look for this year to be filled with number crunching, anysis and actionabile information. 2014 is looking like an exciting year with the convergance of real estate and technology, With icons like CBRE’s purchase of Whitestone Research and NAR’s creation of their Predictive Analytics Group.
As NAR’s Todd Carpenter puts it: [Brokers] have access to an enormous amount of data, and I’m going to be looking at how we can use that data to help our organization, our brokers, and our members make better business decisions that, in turn, help the customers they serve.”
Multifamily Executive releases list of “Top 10 [Multihousing] Growth Markets in 2014” - with Seattle receiving the top spot. According to their report – with corresponding research from RealPage’s MPF Research division - the top ten growth markets for 2014 include: 1. Seattle: 5.8% 2. San Francisco: 4.7% 3. Denver: 4.6% 4. San Jose: 4.5% 5. Nashville: 4% 6. San Diego: 4% 7. Austin: 3.9% 8. Dalls: 3.9% 9. Houston: 3.9% 10. NYC: 3.8%
Read the full article here.
2014: A Year of Change for Banking, Bank Systems & Technology. Kathy Burger, Editorial Director of BankTech, published an editorial about changes in banking technology in 2014. “The industry has a lot on its plate for 2014 – new compliance requirements, legacy systems decisions, workforce and skills issues, and an unsettled competitive environment are just some of the challenges.” Burger expects to see innovations in areas such as big data and analytics, mobile, flexible architecture and cloud as-a-service models. Read the editorial full here.
And In Conclusion
Wall Street Journal starts 2014 on a “bright” note, publishes list of what 33 CEOs are worrying about in 2014. The WSJ interviewed their CEO council, a group of chief executives who meet annually to discuss what might significantly affect their businesses in the coming year.
Highlights of top concerns include:
- Thomas Horton, CEO of American Airlines – Global economic growth and energy prices.
Mark Weinberger, CEO Ernst & Young LLP – new financial rules and regulations reaching across all geographies and impacting virtually every business sector. This increased burden could impede growth at a crucial time for the global economy.
Marcelo Claure, CEO of Brightstar Corp. - There are two issues in the wireless industry today that need to be decisively and transparently addressed. Beyond aging infrastructure and a rising demand for spectrum, the issues of data security and data collection are critical to protecting the safety and peace of mind of consumers when using their mobile devices.
Bernard Tyson, CEO of Kaiser Permanente - Implementation of health care reform. We have not seen this level of fundamental change in the American health care system since Medicare was enacted in the 1960s, and while the goals of the Affordable Care Act are clear, there are a significant number of elements that are still unknown.
Yang Yuanqing, CEO of Lenovo - The rise of emerging markets – and particularly the increasing strength and purchasing power of the growing middle class in China – will impact every global company.
Liam McGee, CEO of The Hartford - The reauthorization of the Terrorism Risk Insurance Act (TRIA) is critical for the economy in 2014. Without it, insurers, which have no ability to price terrorism risk, would likely pull back on commercial insurance coverage, negatively impacting important economic sectors such as lending and construction.
Dan Glaser, CEO of Marsh & McLennan Companies - Corporate tax reform — or the lack thereof. Our current system puts US-based multinationals at a competitive disadvantage against foreign competitors — in terms of effective rate, ability to make acquisitions, and mobility of capital.
Nicholas Akins, CEO of American Electric Power - Economy/Industry and Manufacturing Growth
Tidjane Thiam, CEO of Prudential - The shape, scale and timing of the withdrawal of quantitative easing (QE) by the US Federal Reserve.
- Mark Weinberger, CEO Ernst & Young LLP - Increased burden of financial regulations could impede growth at a crucial time for the global economy.
Read the full article here.
See you next week.