Shut the Garage Door?: NYC Creates Parking Spaces for Car-Share Vehicles
New York city is setting aside hundreds of parking spaces for car-share vehicles.
Three hundred spaces on local streets and three hundred more in city lots will go to companies like Zipcar and Car2Go as part of a two-year pilot program.
“Research is clear that for every one shared car put on a city street, between 5 and 10 less fuel efficient cars are taken off,” New York City Councilman Mark Levine tells the New York Daily News.
So what does this portend for the future of the $30 billion-dollar parking lot and garage industry?
Situs RERC partnered with JNL Parking and Parking Property Advisors to publish an analysis of parking facility capitalization rates last year. Our survey of parking lot owners, investors, advisors, brokers, and appraisers across the U.S. showed an overwhelming majority of participants (78 percent) indicating the parking market environment was strong.
“Right now, services like Uber are definitely having a negative effect on the parking business, especially in hotel valet operations,” says Ted Anglyn, President Parking Property Advisors. “But at least for the short-term, I don’t see car-share parking in New York and elsewhere having a significant impact on parking demand at office buildings and the like.”
Situs Managing Director Joe Ottaiano says, “Rising employment is actually increasing demand for parking spaces at offices buildings, especially in urban locations.” Further, he says, “More people with more disposable income also means more parking demand at malls, movies and for other leisure activities.”
Situs’ Ottaiano also sees a new trend helping the industry, “Hospitals and other facilities offering upscale valet parking to patients is having a positive effect on the garage business.”
Believe it or not, no new parking facilities of note have been constructed in the last 15 years in most major markets, due to rules and regulations limiting construction by private entities, so parking garage and lot owners are sitting pretty.
“There’s still plenty of money to be made in the parking business”, says Anglyn noting that, “It’s easier to get zoning to build an adult bookstore in most cities than to get a permit to build a parking facility.”
Situs Keeps Jobs in Small Town USA
Tune in at 11 PM ET Tonight as Situs’ Steven Bean reveals how other companies can follow suit — on the Jim Bohannon Radio Show.
Ready or Not, Here Comes the Fed Rate Increase
The Federal Reserve is poised to raise its benchmark interest rate in mid-March, significantly sooner than investors had expected, as it moves to keep pace with a wave of economic optimism that started with the election of President Trump.
In an unusually clear statement about a pending decision, the Fed chairwoman, Janet L. Yellen, said on Friday in Chicago that the central bank was likely to act at its next policy-making meeting — barring any unpleasant economic surprises.
Ms. Yellen added that the Fed still expected to raise rates twice more later in the year, which she said would bring the benchmark rate close to a level that the Fed regards as neutral, with low rates no longer providing an inducement for borrowing and risk-taking. That outlook signals that an end is finally in sight for the Fed’s economic stimulus campaign, devised during the depths of the financial crisis more than eight years ago.
Stanley Fischer, the Fed’s vice chairman, delivered the same message at the same time at a conference in New York. “We’ve seen a lot of substantial change in a relatively short time,” Mr. Fischer said of the post-election shift in economic conditions. “There is almost no economic indicator that has come in badly in the last three months.”
Mall Madness: Revitalizing Retail CRE
Retail throughout the country is going through growing pains. Redevelopment is turning old, tired malls into retail destinations.
Two West Coast investors are finding ways to bring customers back to malls and shopping centers by reinventing the shopping experience. Courtesy of Pacific Retail Capital Partners Pacific Retail Capital Partners focuses on value-add core plus space and prefers opportunities that lack active management, but the retail property has a clear reason to exist, according to Pacific Retail Capital Partners managing partner Steve Plenge. The firm, which manages about $1B worth of assets, brings active management and focuses capital to improve sales and net operating income over a general period.
When it redevelops a property, PRCP brings in new design and entertainment concepts. At Shops at South Town in Salt Lake City, Plenge said the firm is adding entertainment concepts and a theater. Digital screens throughout the mall provide live feeds, art and additional interactive content. An interactive kid’s wall has been particularly popular. “We try to do something that is a bit more cutting-edge on the retail end,” Plenge said. “Since we’re a smaller firm, we have the ability to be more focused on the headwinds in the retail world and continue the evolution of retail.”
Plenge said the firm typically prefers Class-B to Class-B+ malls lacking attention where the firm can bring relevant design to the mall. PRCP typically redoes the restrooms, adds family restrooms and transforms food courts into curated food halls, often with local food operators. Its Paseo Nuevo mall has hosted events, such as College Night Out and a fall fashion show. Other options PRCP has considered include adding multifamily, hotels and medical offices to its redeveloped properties. A lot of REITs focus on national retailers, but PRCP prefers bringing in local retailers and food services to create more of an eclectic group.
read more: BisNow
Target Changes Focus
Target is changing strategies, instead of settling into the upscale department store niche, the firm is joining the price war to try to match Walmart’s bargains.
The move shocked investors, who largely thought Target would fight for higher margins by defining itself as a more upscale retailer, Bloomberg reports. Instead Target announced it is lowering prices and will accept lower margins. Target said it plans to retain shoppers by refurbishing over 600 stores and opening 100 smaller locations in cities and on college campuses over the next two years. Investors responded quickly — the firm’s share price plummeted 14% to $57.30, marking its largest intraday fall since 2008. The change comes after Target reported weak fourth-quarter earnings that hit the bottom end of company forecasts. Profit was $1.45/share, below the average analyst estimate of $1.51. Same-store sales were down 1.5%.
read more: BisNow
That’s Shoe Business: Crocks Closing 160 Stores
Crocs Inc. announced plans to shutter 160 stores, nearly 30% of the colorful plastic clog maker’s total portfolio, over the next two years. It comes after reporting a 10% decline in sales during Q4, the Wall Street Journal reports. This will drop the retailer to about 400 stores, and while Crocs did not say whether there would be layoffs, the firm has cut jobs in the past after shuttering locations. Following its disappointing quarter the shoemaker also announced that CEO Gregg Ribatt will be stepping down; he will remain on the company’s board and will be succeeded by current president Andrew Rees as of June 1.
read more: BisNow
London’s ‘Cheesegrater’ Building Sold
British Land and Oxford Properties sold their Cheesegrater building to Chinese investors for £1.2B.
The iconic London wedge, officially called The Leadenhall Building, was acquired by CC Land, helmed by Chinese property developer Cheung Chung-Kui. CC Land also bought Vodafone’s Paddington headquarters for £290M in January. This purchase is the largest transacted by a Chinese company so far this year. With 46 floors, it is the tallest building in the City of London. When it completed in 2014, it set record rents for the City.
read more: BisNow
Frexit: The Next French Revolution Could Wreck the European Economy
The Socialist and Republican parties, which have held power since the founding of the Fifth Republic in 1958, could be eliminated in the first round of a presidential ballot on April 23rd. French voters may face a choice between two insurgent candidates: Marine Le Pen, the charismatic leader of the National Front, and Emmanuel Macron, the upstart leader of a liberal movement, En Marche! (On the Move!), which he founded only last year.
The implications of these insurgencies are hard to exaggerate. They are the clearest example yet of a global trend: that the old divide between left and right is growing less important than a new one between open and closed. The resulting realignment will have reverberations far beyond France’s borders. It could revitalize the European Union, or wreck it.
read more: The Economist
More Americans Want to Downsize their Homes than Supersize Them
The American Dream of owning your own home remains. But the home itself appears to have gotten smaller.
As American homes grow larger in size (and higher in price) many people say if they decided to move, they’d want to downsize. More homeowners would rather have a smaller house than a larger one (37% compared to 23%), according to research from real estate site Trulia. Here’s how it breaks down: Some 60% of people living in large homes of 2,000 square feet and over said they’d rather pick a smaller one next time around; 69% of people in the smallest of homes under 800 square feet said they’d like to supersize their accommodations.
Older Americans, more of whom are homeowners, are obviously more likely to want to downsize than millennials. The same percentage of baby boomers (37%) said they plan to move at some point in their life, and 42% of that number said they would prefer to live in a smaller home, according to a separate study released last December by the Demand Institute, operated by the research groups, The Conference Board and Nielsen.
But there are bigger forces at play too. “Those living in the biggest of homes know what the downsides are of living in those homes,” said Ralph McLaughlin, chief economist at Trulia. The expenses are large — utilities, taxes, maintenance and furnishing — in those homes and there’s greater potential for something to go wrong and need repairs. In theory, anyway. Older homes are more likely to have problems regardless of the size, like this California couple who moved to a 1929 home that was sinking and had rotten foundations.
Small homes are gaining in popularity, and are showcased in television programs like HGTV’s “Tiny House Hunters,” which pairs people with homes of about 600 square feet. Small homes can also offer homeowners big and fast returns, likely due to increased demand and proximity to city centers. Tiny homes can also be the right move for retirees, too, what with the lower costs in building and maintaining.
And the number of townhouses being built — often closer to public transport, smaller and less expensive than detached homes — also increased by nearly 13% last year to 97,000, according to a National Association of Home Builders analysis of Census Bureau housing starts and completions data released last week.
read more: MarketWatch
New Graceland Expansion Breaks Ground
Graceland unveils Elvis Presley’s Memphis, a 200,000-square-foot, $45 million project across from Presley’s mansion in Memphis’ Whitehaven neighborhood — Memphis Commercial Appeal’s Bob Mehr and Wayne Risher: “Elvis the Entertainer and Presley Motors exhibits anchor the complex, styled after a lifestyle retail center, and give fans expanded access to Elvis’s cars, motorcycles — even a ski boat named Gladys after his mother.”
A purple, 1956 Cadillac El Dorado occupies a prominent corner facing the new ticketing center, and several items have been brought out of storage, including two ski boats, a purple 1975 Lincoln and a 1969 Mercedes two-door coupe. Sequined capes, jump suits and other performance costumes have been moved to the 20,000 square foot Elvis the Entertainer exhibit. Visitors used to have to look at the costumes from one angle, from behind a glass wall. Now they’re in display cases that fans can walk around and view from all angles.
read more: Commercial Appeal
Week Ahead: Help Wanted
It’s all about JOBS for scheduled data in the week ahead culminating on Friday with the
Big Kahuna – the February Jobs Report — and there are clearly correlations between positive JOBS numbers and CRE.
Here’s the way it shapes up:
ADP Employment Report 8:15 AM ET
February Jobs Report 8:30 AM ET
Have a prosperous week ahead!
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