Commercial real estate is a dynamic industry. Keep up with happenings with Spaces’ monthly recaps of the most valuable industry articles we’ve recently come across, focused on news in Ohio, Michigan and Pennsylvania.
The effects of online shopping are touching several real estate sectors. According to a recent article in the National Real Estate Investor, e-commerce is boosting growth within the industrial sector. As consumers continue to order products online, the demand for distribution facilities and infrastructure increases.
The National Real Estate Investor reported that “Global e-commerce is expected to double to $1 trillion in three years…” This trend is changing the face of retail and industrial occupancy. Because of continued rise in online shopping habits, retail real estate is decreasing in demand.
Construction activity surrounding distribution is on the rise, REJournals.com reported. Several big name companies are seeking space for new facilities, like Amazon, Unilever, PetsMart and Home Depot. Yahoo Finance also attributed the growth in the industrial sector to e-commerce, referenced to as a “demand driver.” During Q4, 5.4% of retail market transactions occurred via e-commerce.
Technologies Outside of E-Commerce Also Driving Change
The Vice Chairman and Partner of Deloitte & Touche LLP, Bob O’Brien, recently discussed the dynamic landscape of CRE with the Wall Street Journal. O’Brien also pointed to the changes generated by the proliferation of e-commerce within the real estate sector, including impacts to warehouses and distribution centers and alterations to existing retail facilities.
In addition, O’Brien exapanded his discussion into other technologies, that can be utilized within one’s CRE department or organization, to enhance capabilities. Though CRE companies may traditionally have been slow to catch on to new technologies, O’Brien suggests the use of advanced data analytics to lend greater value to tenants.
He said, “Specifically, CFOs can help increase lease revenue by equipping their finance and leasing teams with sophisticated data management, data integration and analytical software tools.”
New technologies, like e-commerce, are forever altering the state of commercial real estate.
In Big, Tall CRE News
America’s famous landmark, The Empire State Building, may be back on the public market.
The building owner, the Malkin family, aims to construct a publicly traded company entitled “Empire State Reality Trust” by grouping the notorious skyscraper with 18 real estate assets, according to a recent article in the WSJ. Proceedings are still ongoing. But, if 80 percent of current shareholders vote yes, the plan will be set in motion. WSJ reported, “The plan has divided investors.”
News Wrap Up: In Our Region
JLL professionals recently wrapped up a sizeable deal for KTR Capital Partners. The Core Midwest Distribution Portfolio was sold to Welsh Property Trust at $99.5 million. The portfolio includes five buildings that are located across several Midwest cities including Chicago, Indianapolis, Columbus and Cincinnati.
- Polaris Industries Inc. closed a $5 million dollar deal for industrial space located at Wilmington Commerce Park. Polaris intends to turn the space into a distribution facility, with the possibility of creating approximately 100 new jobs.
- Ball Metal Beverage Container completed a sizeable lease agreement to move into a new building in Monroe. The 170,000 square foot space also houses the Monroe Logistics Center.
- The future utilization and design of the former School for Creative and Performing Arts, located in Pendleton, is currently under consideration. The owner, Core Redevelopment LLC, is discussing the possibility of a mixture of hotels, entertainment, apartments and eateries as opposed to apartments.
- The Aurora and Bainbridge Geauga Lake amusement park shut down in 2007. The land, which totals about 500 acres, is back on the real estate market. The seller is willing to sell the land off in portions, down to 3.5 acres.
- The Internal Revenue Service relocated to a space that is 44% smaller than its original location. The new space, at Corporate Plaza 1 located in Independence, spans approximately 35,000 square feet.
- US Bank took ownership of the Brewery District office building from Edward Cos. Affiliate. The 146,000 square foot building, located at 500 South Front Street, was obtained following a two-year loan extension.
- The NorthPointe Hotel and Conference Center, which has traditionally served Nationwide Mutual Insurance Company, is seeking business from other markets. The center is specifically targeting business communities and wedding services.
- The office space located at 28411 Northwestern Highway, One Northwestern Plaza, was purchased for $19.3 million. Deal details have not been released; however, the new owner is an investment group.
- The Borders Group Inc. headquarters in Ann Arbor, priced at $6.9 million, was put on the market since last year. The 330,000 square foot space sold last month. All sale details are confidential.
- In order to consolidate space, American Eagle Outfitters has put 50,812 square feet of space on the market. The space up for sale, located at SouthSideWorks, is distributed among three offices within the building.
- The Urban Redevelopment Authority continues development on the East Side, following a small transaction with Mosites Company. Mosites Company intends to add a transit center. When complete, the project is forecasted to total approximately $75.2 million.
Please feel free to add any relevant industry news we might have missed in the comment section below.
Newspaper image via NS Newsflash