Commercial Real Estate & Business News – June 8, 2015

Where are Cap Rates and Interest Rates Headed?

Not everyone in the commercial real estate industry believes that interest rates will rise this year, despite indications in March that the Federal Reserve would probably increase them. And even if rates do rise, commercial real estate experts disagree as to how that will change business. “It’s not a foregone conclusion that rates will go up,” said Adam Petriella, executive vice president for capital markets at Coldwell Banker Commercial Alliance. “There are a lot of subcurrents in the market that could preclude or prevent a rate hike. The ‘normal’ cycles are not normal.” In the old normal, Petriella says, interest rates rise, cap rates follow and prices decline. But in this global economy awash with liquidity and structural issues, low rates may prevail, he speculates. “The markets are as diverse as the needs of the buyers themselves,” Petriella said... Read more »

Real Estate Takes Its Place as the Fourth Asset Class

Before 1980, commercial real estate was invisible in institutional investment portfolios. More recently considered an “alternative investment,” today’s institutional investors typically allocate an average of almost 10 percent of their portfolios to real estate, which continues to gain a foothold among limited partners, with enduring implications for the industry. Has real estate joined the big three institutional asset classes — stocks, bonds and cash — as a permanent fourth asset class?... Read more »

Rents Jump 6.5% in May

Three months in, it seems like peak leasing season has gotten off to a good start for landlords across the country, and the cries of doom and gloom for 2015 have abated. In data released yesterday, MPF Research reports that rental rates jumped 6.5% in May, which breaks the previous April high for this cycle... Read more »

Study: Arizona Ranked One of the Best in the Nation for Innovation

Arizona was ranked one of the best states in the nation for innovation, according to a recent study from FastCompany.com. The Valley of the Sun came in at No. 4 in the nation for innovation, beating out old entrepreneurial leaders such as Silicon Valley, California and Boston, Massachusetts. With Arizona so close in proximity to entrepreneurial-giant California but boasting much lower startup costs, it is not too surprising that entrepreneurs have turned to the Valley to create and build their networks... Read more »

Metrocenter Mall Adding New Walmart Supercenter

Lennar Multifamily assembled 6.7 acres at the intersection of Dorsey Lane and Apache Boulevard in Tempe to build a 395-unit apartment complex. “The Hayden at Dorsey Station” will total 600,000 square feet, with a podium-style ground floor parking and retail, and floorplans of one, two, and three bedrooms. The project shares an intersection with the Dorsey Lane light rail stop. Two respective properties, a 101-unit two-story hotel and a 78-unit two-story multifamily of ten buildings, currently occupy on the proposed project footprint - all to be demolished. Lennar purchased these properties for a combined value of $11,475,000 or $1,712,687 per acre... Read more »

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