|Retail Set to Finish Strong in 2017
Retail has been seen as an embattled sector for much of 2017, but as the year is closing, the narrative is changing.From Thanksgiving Day through Cyber Monday, over 174 million Americans shopped in stores and online, according to a survey from the National Retail Federation. While they were surely deal-hunting, average spending per person over the five-day period was $335.47, with older millennials (25-34 years old) spending an average of $419.52. This represents a marked increase over last year’s average spend of $289.19.
Perhaps the most surprising number from the NRF survey results, though, is 64.6 million: the number of people who shopped both in stores and online.
“Any increase in sales for in-store shopping could give the bricks-and-mortar side of retail, especially the regional mall market, a badly needed boost heading into 2018,” said Situs Managing Director Thomas Johnson.
Adobe Insights, which measures 80 percent of all online transactions from 100 major U.S. retailers, reported that digital transactions totaled $6.59 billion over the five-day period. This is a 16.8 percent increase from last year.
The momentum seems to be carrying past Black Friday, with Foot Locker, Macy’s and Gap being the three biggest gainers in the S&P 500 during the past month. Each increased 28 percent or more, and as of this writing they are still riding high.
The future is unwritten, of course, but in the present, retail is very much alive and thriving.
In CVS Acquisition of Aetna, Experts See Increased Traffic, More Stores
After CVS Health Corp. announced on Sunday that it bought Hartford, Conn.-based Aetna in a cash-and-stock transaction worth about $69 billion, it was clear the deal would change the way that basic health services are delivered in the United States. Commercial real estate experts also see potential for CVS to strengthen its position against Walgreens Boots Alliance, its closest peer when ranking the largest pharmacy retailers by prescription sales and store locations.
In roundups of the largest pharmacy retailers by prescription sales, CVS Health Corp. and Deerfield, Ill.-based Walgreens usually jockey for the top two positions. Woonsocket, R.I.-based CVS operates more than 9,600 retail and specialty stores across the country, while Walgreens has about 13,000 stores in 11 countries, and is planning to buy about 1,932 Rite Aid stores by the spring of 2018.
“This is going to make CVS stronger against Walgreens,” says Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment-banking firm based in New York City. “Some years back, CVS, Walgreens and many other drugstore retailers decided to offer health care. They have RNs available, so you can go in and get diagnosed.”
As Americans seek ways to cope with the rising costs of health services and health insurance, drugstores that provide affordable and convenient approaches to low-level health care appear to offer at least a partial solution, Davidowitz says. He notes that by expanding its range of services, CVS has given consumers even more reason to come to its stores.
read more: NREI
Raleigh Hotel Market: On the Rise
Population gains and steady rent growth are luring investors and developers to the Research Triangle, and the hospitality industry is one of the largest beneficiaries. HVS Senior Vice President Janet Snyder and Project Manager with the firm’s Detroit office Michael Bendert have carried out a report regarding Raleigh’s hotel landscape. The city was named among the top 12 destinations in the world to visit in 2017 by Forbes Travel Guide, a designation that helped boost an already strong hotel and tourism industry.
In 2015 and 2016, five hotels opened in Raleigh — three properties in Brier Creek (one under the Aloft brand), one in Crabtree Valley and another Aloft hotel in the University of North Carolina area. In the first 10 months of 2017, the city added five hotels: Four Points Raleigh North, AC Hotel by Marriott North Hills, the Residence Inn by Marriott Downtown, The Stateview-Autograph Collection on the Centennial Campus of North Carolina State University and the Fairfield Inn & Suites by Marriott Raleigh North, across from the Triangle Town Center. Initial data show that the new guest rooms are being quickly absorbed by the market.
Moreover, three hotels in Crabtree Valley underwent extensive renovations of the public and guest spaces in 2016 — Marriott, Embassy Suites by Hilton and Holiday Inn. Occupancy was hurt during the modernization, but is now ramping back up.
read more: Commercial Property Executive
Council Panel Votes to Limit Self-Storage in Industrial Zones
A New York City Council committee provided a key approval for legislation to restrict the development of self-storage facilities in industrial business zones Thursday, despite biting criticism of the bill by one of its members.
The measure, which is likely to be approved by the full council Dec. 19, would require a special permit to build self-storage projects in most of the 21 IBZs, which account for around half of the city’s manufacturing space. Obtaining this permission would require going through a nearly yearlong public review process that culminates in a council vote.
The new requirement would not apply in two zones in the Bronx and another pair in Staten Island, along with part of a zone in Jamaica, Queens. But self-storage companies would still need to set aside space for industrial square-footage in any project they build, according to the bill. Existing facilities would be grandfathered. (In the IBZs that opted out, self-storage facilities up to 50,000 square feet will be allowed as-of-right. Only buildings above that size will be required to set aside 25 percent of the space for industrial use.)
The council and Mayor Bill de Blasio have long wanted to restrict the proliferation of certain uses — such as hotels, offices or strip clubs — in areas that are supposed to be home to manufacturing and industrial jobs. Nonindustrial uses, the argument goes, can pay more for rent or land and thus tend to squeeze out manufacturing companies that provide higher-paying jobs.
read more: Crain’s
FAO Schwarz Is Making a NYC Comeback in Rockefeller Center
FAO Schwarz will be getting a new, albeit much smaller, lease on life in New York City, with a 19,000-plus-square-foot store in Rockefeller Center, Commercial Observer has learned.
The toy retailer, which vacated a 61,000-square-foot space at the General Motors Building in 2015 after a 30-year run, has leased the space at 30 Rockefeller Plaza, sources with intimate knowledge of the deal told CO. It will replace the NBC Experience Store, which will be shuttering imminently. (NBC’s retail business has been replaced with the new lobby store at 30 Rock.)
FAO’s new space at the Tishman Speyer-owned Art Deco property between West 49th and West 50th streets will span the ground floor and mezzanine level when it opens next fall. Length of the “long-term” lease and taking rents were not immediately available. (Tishman doesn’t provide asking rents at Rockefeller Center.)
To the dismay of children, the over 150-year-old FAO closed its iconic store at the GM Building at 767 Fifth Avenue between East 58th and East 59th streets in summer 2015 after nearly 30 years, citing rent issues.
read more: Commercial Observer
U.S. Employers Hire at Healthy Rate in November
The economy appears to be on its firmest footing in at least a decade, with hiring picking up from earlier this year and the unemployment rate holding at a 17-year low in November.
Nonfarm payrolls rose a seasonally adjusted 228,000 in November, the Labor Department said Friday. It was a slight slowdown from October hiring, which was boosted by a rebound from late-summer hurricanes, but was well above the pace recorded earlier this year. Revised figures showed the economy added 3,000 more jobs than previously estimated in October and September.
Meanwhile, the unemployment rate remained at 4.1 percent last month, matching the lowest level since December 2000.
Economists surveyed by The Wall Street Journal had expected 195,000 new jobs and a 4.1 percent unemployment rate last month.
read more: WSJ
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