Posts tagged Commercial Real Estate
MIPIM 2014 started off this week with high visibility and networking opportunities for the NAI Global team attending the event.Paul Danks, Managing Director, NAI Global and David Haigh, Vice President, NAI Hiffman, attended an event chaired by Baroness Susan Williams, Executive Director, Atlantic Gateway. Liverpool Mayor Joe Anderson, Officer of the British Empire (OBE) and Sir Howard Bernstein, CEO of Manchester City Council, addressed a distinguished group of international investors, developers, occupiers and owners at the “Back to the Future” opening session on Monday, March 10. The discussion focused on the Atlantic Gateway, a combination of over $1.7 billion of infrastructure investment projects in the North West UK, designed to transform the entire region. One of the major projects addressed is SUPERPORT, a logistics freight hub in Liverpool that is poised to transform freight capability in the northern UK.
A new report, “Liverpool City Region Local Enterprise Partnership SUPERPORT: An Analysis of the Supply of, and Demand for Distribution Space Within the Liverpool City Region,” was coordinated by a team led by NAI Global on behalf of the Liverpool City Region Local Enterprise Partnership (LEP), leader of the Liverpool SUPERPORT freight hub program. The report examines the factors that will drive demand, from investment in SUPERPORT assets and capabilities to current and planned supply of sites that can meet the future demand for logistics facilities. A press release supporting the report was issued on Monday, and NAI Global will present the findings of the report to potential investors, developers, owners, operators, clients and media at an event aboard the NAI Global yacht, Costa Magna, on Thursday, March 13.
Preliminary press coverage of the report includes articles in Place North West (link to article) and in the Liverpool Echo (link to article) quoting Paul Danks: “Logistics is a recognized growth sector in the UK and internationally as businesses adapt to changes in customer demand and methods of sourcing, manufacturing and delivering goods and services. SUPERPORT will help Liverpool secure its position as an innovative, competitive multimodal port, and create opportunities for investors, developers, occupiers and real estate brokers and others active in the global industrial and logistics property market.”
NAI Global president, Jay Olshonsky, said: “Currently, 45% of North American trade enters the UK via Liverpool, and the location is ideally positioned to benefit from increased Atlantic activity and the growth of Latin and South American economies, providing outstanding opportunities for NAI Global members and their clients, developers investors and occupiers to take advantage of the enhanced competitiveness of the Liverpool City Region for logistics and manufacturing operations.”
Stay tuned for more coverage from MIPIM!
Congratulations to NAI Hiffman on its multiple wins for its Management Services team in the 2013 TOBY (The Outstanding Building of the Year) Award competition, sponsored by the Building Owners and Managers Association of Suburban Chicago (BOMA/Suburban Chicago). In addition, the firm was also named to the Chicago Tribune’s list of Top Workplaces for 2013, ranking 33rd among 126 firms.
“We are very proud of NAI Hiffman for both of these achievements,” said Jay Olshonsky, President, NAI Global. “The external recognition underscores our strength in local leadership and commitment to client service, not just in the Chicago area, but throughout the NAI Global network.”
Through the prestigious TOBY program, BOMA chapters worldwide recognize properties that exemplify outstanding quality and management. NAI Hiffman won four out of six categories:
• Under 100,000 Square Feet Category: Summit Oaks in Oakbrook Terrace, managed by the team of Paul DiCosola, Tammy Sullivan, Donna Eyre, and Bill Mareska
• 100,000 – 249,999 Square Feet Category: 909 Davis Street in Evanston, managed by the team of Tom Murphy, Chris Rackham, Stephanie Crump, Scott Wilson, and Matthew Dineen
• Renovated Building Category: Edens Corporate Center in Northbrook, managed by the team of Tom Murphy, Elizabeth O’Connor, and Rodolfo Ricardo
• Suburban Office Park – Low Rise Category: Butterfield Centre in Lombard, managed by the team of Melissa Woolsey, Chris Zivalich, Donna Monterubio, Ed Cosme, and Luke Hannon
The winners will advance to a regional competition later next year. The TOBY Award is the most comprehensive program of its kind in the commercial real estate industry. All facets of the building’s operations are thoroughly evaluated during the judging process, including tenant relations programs, preventative maintenance, community involvement, emergency preparedness, energy conservation and continuing education for building personnel.
NAI Hiffman is one of eight real estate firms on the Chicago Tribune list of 126 companies and organizations as Top Workplaces 2013. These companies have been recognized as Top Workplaces based solely on surveys about the workplace completed by their employees. According to the survey, companies ranked as Top Workplaces are not only better places to work but are more likely to be successful than peer organizations.
“These awards are a testament that we have the best people and a workplace that contributes to providing optimal results for our clients” said Dave Petersen, CEO, NAI Hiffman.
NAI Global presented its economic outlook webcast last week. Led by NAI Global President Jay Olshonsky, the webcast featured the economic insights of Dr. Peter Linneman, Chief Economist of NAI Global.
According to Dr. Linneman, despite continuing economic and political uncertainty, US commercial real estate markets are reacting favorably, although predictably, with some sectors – notably multifamily and industrial – demonstrating improvement and growth potential.
Dr. Linneman noted that renovation of existing properties in all sectors rather than new construction is driving growth, and has helped balance supply and demand. There is a strong industrial recovery underway, led by increased demand for online warehousing, resulting in healthy vacancy levels that will continue to fall. Multifamily construction is rebounding, but is still below normal levels, and an upswing in renovations is driving capital expenditure. Underproduction from the past several years resulting in a prolonged shortage will keep rents above average, but below maximum.
In the office sector, construction and renovation projects are at an all-time low, but renovations that were deferred during the recession are back on track, even though jobs have yet to return to pre-recession levels. As a result, vacancy rates have seen a slower decline, and are expected to continue to fall as the economy improves. Office rents are above average only in cities where jobs have recovered, including Dallas, Houston, Philadelphia, Los Angeles, Chicago, San Francisco, Boston, Washington DC and New York City (downtown and midtown).
The outlook for the retail sector is slightly less optimistic, with no new net supply and shrinkage of total inventory. Retail rents remain well below average, particularly in Atlanta, Houston, Boston, Chicago, Austin, Seattle, San Diego, Washington DC, Los Angeles and San Francisco. Although hotel construction projects fell significantly nationwide except for New York City, new owners are investing capital into existing properties in deferred renovation projects. Occupancy rates indicate a strong recover is underway.
Future defaults could bring additional opportunities for investors. Dr. Linneman noted that investors should look at 2015 – 2018 as the real period of projected defaults as most CMBS loans underwritten in 2005 through early 2008 when underwriting was more lax were 10-year loans. This could result in more product across all sectors becoming available through defaults in 2016 – 2017.
Dr. Linneman concluded, “The US commercial real estate market today is doing what we expect it do in an era of political and capital market uncertainty where we are seeing very little new construction. However, when we have more clarity than uncertainty, we could see stunning economic growth reminiscent of the 1970s-80s and post-World War II.”
Look for the webcast replay to be posted on www.naiglobal.com next week and stay tuned for details on NAI Global’s 2014 Economic Outlook webcast scheduled for January.
In his latest white paper, “Unprecedented Global Government Intervention,” NAI Global Chief Economist, Dr. Peter Linneman, discusses the dangers and pitfalls of an extraordinary wave of global government intervention taking place in capital markets. Citing historical examples, he demonstrates intervention only prolongs periods of stagnation and uncertainty. “In all, government activity is now deterring the very investment it was hoping to spur.”
As we enter the third quarter of 2012, we are seeing the pattern of unprecedented government intervention continue. Governments around the world are using the powerful tools at their disposal; spending, regulations, fiscal policy, and taxes to interfere with the free market in hope of sparking economic recovery. The result is that instead of recovery, we are experiencing further distress as the Euro crisis intensifies and even Brazil and China’s economies slow.
The following post is an excerpt from the Summer 2012 issue of The Linneman Letter.
Every executive with whom we speak expresses utter confusion about the state of the global and U.S. economy and capital markets. As a result, they are in a muddle about their investment strategies. They closely monitor economic and capital market data for signs that “everything is all right,” yet even as the U.S. economy grows at a seemingly healthy rate, they remain extraordinarily ill at ease. Why?
Simply stated, this discomfort reflects the fact that even though U.S. real GDP and employment are growing at moderately healthy paces, we remain in totally uncharted waters in terms of both the economy and our capital markets. And when private decision makers are in unfamiliar (and unrecognizable) landscapes, they act very cautiously.
For example, we have not seen in our lifetime federal budget deficits as large as those which currently exist. Not only is U.S. federal spending as a percent of GDP at a peace-time high, but federal revenues as a percent of GDP are well below their historic norm, resulting in unprecedented budget deficits. Compounding the problem of unprecedented U.S. budget deficits is the fact that there is neither political leadership nor a political consensus on how to bring the federal budget back in balance. This is creating a situation in which the only clarity is that the current situation is not sustainable.