Commercial Real Estate News Wrap Up From Liberty SBF: July 20 2016

July 20, 2016

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The latest Beige Book, released by the Federal Reserve last Wednesday, reports that commercial real estate sales and leasing activity remained stable or improved in almost all reporting districts. Notable absorption rate and rent increases were documented in Atlanta and Kansas City while improving industrial real estate markets were observed in New York, Dallas, and Richmond, VA. This growth is in line with the general growth of the U.S Economy, which was stated to be “modest and moderate,” similar to its description in the last Beige Book.

The convergence of e-commerce and brick-and-mortar shops is driving shopping centers to change the way they do business. In an effort to deliver experiences to consumers that they can’t have online, shopping centers have begun to utilize restaurants, entertainment complexes, and movie plazas to generate increased foot traffic. Furthermore, shopping centers are looking to open physical locations for online storefronts such as Warby Parker and Amazon Books as a way to attract customers. However, Melina Cordero, head of retail research for CBRE, states that “bringing in cool new tenants is a financial risk,” mostly due to the lack of credit they may have.

According to Morningstar, the matured CMBS loans payoff rate has increased by as much as 2.7% for the month of June. Although Morningstar projects that this payback rate will fall as the year progresses, analysts are worried that there may be future trouble refinancing loans taken out between 2006 and 2007. Although research shows that $100bil of CMBS loans will mature in 2017, Morningstar CMBS head Kenneth Cheng tells Bisnow that, “[it is unknown] what the effect of new risk retention rules set to take effect this Christmas Eve will have on the ability of CMBS lenders to compete with other CRE lenders.”

8+1 (That’s 9) Things You Need To Know

  1. Mid Atlantic Real Estate Journal covers Liberty SBF’s $75MM B Round capital raise
  2. Three development trends with potential for boosting tenant satisfaction
  3. Flurry of liquidity has become available for CRE borrowers
  4. What the Amazon store in Manhattan’s Hudson Yards might mean for retailing
  5. Lenders are still eager to refinance the right kinds of properties in growth markets
  6. Life insurers saw a 7.7 percent hike in mortgage portfolios last year
  7. AZRE names “Most Influential Women in CRE” for 2016
  8. Don’t count banks out of filling CRE debt void just yet
  9. Renaissance in Downtown LA continues to surge