Republican leaders in both the House and Senate reached a tentative agreement Wednesday, merging their proposed tax reform bills. It was a major milestone in President Donald Trump's push to overhaul the U.S. tax system.

GOP lawmakers are set to vote on the combined bill as early as next week,  according to CNN . If approved by the full Congress, the new tax policy could have strong implications for the commercial real estate market, with  several experts regarding the bill as highly favorable  to the industry at large. Congressional leaders expect a vote before the chambers recess for Christmas.

Below are seven items in the bill that could impact the industry, according to a report from Marcus & Millichap:

Continue reading "7 Items In The GOP's Combined Tax Bill That Could Affect Real Estate"

Good times roll on for suburban apartment landlords

 

If you own an apartment building in downtown Chicago, the grass looks a lot greener out in the suburbs right now.

With developers adding thousands of apartments to the city skyline, the supply of downtown units is exceeding demand, dragging down rents. But that's not the case in the suburbs, where development also has surged, but not enough to weigh on the market.

"The near-term outlook for rent growth is better out there," said Ron DeVries, senior managing director in the Chicago office of Integra Realty Resources, a consulting and appraisal firm. "You just haven't seen the supply additions out in the suburbs that you've seen downtown."

The median net suburban apartment rent was a record $1.45 per square foot in the third quarter, unchanged from the second quarter but up 4.5 percent from a year earlier, according to Integra. Net rents include concessions such as a free rent.

The suburban occupancy rate, meanwhile, was 95.4 percent in the quarter, vs. 95.5 percent in the second quarter and 96.1 percent a year earlier.

Demand for apartments soared after the recession, as fewer people bought homes in the aftermath of the financial crisis. Demand has remained strong amid an expanding economy and job market, the primary driver of apartment demand. In the suburbs, the median net rent has risen nearly 23 percent over the past five years.

Rents soared downtown, as well, but they are dropping now amid a construction boom. Developers will complete a record 4,500 downtown apartments this year, another 3,500 in 2018 and as many as 5,000 in 2019, according to Integra.

Many downtown developers are offering two months of free rent and other deals to fill their buildings. The result: The average Class A net downtown rent fell to $2.83 per square foot in the third quarter, down 2.8 percent from a year earlier, according to Integra.

BUSY IN THE BURBS

Developers also have been busy in the suburbs, building 2,831 units last year—the most annually since at least 1996—and another 1,843 this year, according to Integra. Not only are there fewer projects in the suburbs, but they are spread out over a large geographical area, limiting their impact on the market. One exception may be downtown Evanston, where more than 1,100 apartments are in the works.

The North Shore, which includes Evanston, had the lowest occupancy rate, 93.8 percent, among all 10 suburban submarkets tracked by Integra, while Will County had the highest, 96.6 percent.

The Naperville/Aurora submarket led the suburbs in rent growth, with the median net rent rising 6 percent between third-quarter 2016 and third-quarter 2017, according to Integra. The Kane and Kendall county submarket had the lowest rent growth, 0.7 percent.

Amid a strong economy, DeVries doesn't see any slowdown on the horizon for apartment landlords. He expects overall suburban rents to rise 3.5 percent over the next 12 months.

 

Source: Crains Chicago 12/4/2017

Good times roll on for suburban apartment landlords

Third Quarter Numbers Helping to Extend 'Golden Age of Multifamily

Renter demand for apartments continued to accelerate in the third quarter of 2017 as the market absorbed more than 70,000 units and the overall national vacancy rate for U.S. apartments continued to trend lower after turning sharply up at the end of last year.

"The third quarter (vacancy) numbers are a welcome sign (for owners) after the sharp increase at the end of last year. Overall, it was a strong third quarter, which was a nice surprise," said Michael Cohen, CoStar director of advisory services, during this week's State of the Multifamily Market Q3 2017 Review and Outlook. "We're still in the golden age for multifamily, but we're seeing signs of a gradual slowdown in the apartment market."

Continue reading "US Apartment Demand Bounces Back from Slow Down in Early 2017"

CRE National Price Indices Maintain Upward Trend

 

The CoStar Commercial Repeat-Sale Index (CCRSI) ended this past summer much as it began, with upward momentum in pricing momentum for commercial real estate as both national composite indices advanced by a healthy margin for the 12-month period ending in August, driven by improving price conditions for smaller, lower-end properties in markets across the U.S. 

The value-weighted U.S. Composite Index, which reflects larger asset sales common in core markets, advanced 3.5% in August from a year earlier while the equal-weighted U.S. Composite Index, reflecting lower-priced property sales typical in secondary and tertiary markets, rose by a solid 16.5%. 

Continue reading "CRE National Price Indices Maintain Upward Trend"

End of the Current Real Estate Cycle

Real News by RealNex

Author: Jeffrey D. Fisher Ph.D.

Sam Zell (pictured above) recently stated: “The real estate cycle is nearing its end” (Pensions & Investments, May 1, 2017).  We must admit that Sam had great timing when he sold his Equity Office REIT to Blackstone in 2007 which was the peak of the last cycle.

Of course, Sam is also not afraid of real estate recessions.  He earned the title “The Grave Dancer” back in the early 90s when he bought properties at steep discounts from their replacement cost during the bottom of that cycle.

So, what are the facts?  Yes, returns have been falling for about 8 consecutive quarters according to the NCREIF Property Index, which includes over a half trillion dollars of real estate around the country managed by the large institutional investors.  The first quarter 2017 total return was 1.55 percent, down from 1.73 percent in the fourth quarter 2016 and 2.21 percent a year ago.

Continue reading "End of the Current Real Estate Cycle?"

Big deals heat up west suburban apartment market

 

A gang of real estate investors has descended on the western suburbs, dropping more than $350 million in a flurry of apartment deals near Interstate 88.

Four firms including Goldman Sachs and CBRE Global Investors have acquired big multifamily properties in Wheaton, Naperville, Warrenville and Aurora, according to DuPage County property records. In another nearby deal, a San Francisco investment firm is buying the 640-unit Addison of Naperville but has yet to close on the acquisition, according to people familiar with the transaction.

Continue reading "Big deals heat up west suburban apartment market"

Q4 2015 Apartment Trends

 

Separate studies issued this week share the same conclusion that demand for rental apartments and other housing options will stay at elevated levels largely due to the continued robust household formation and limited affordable housing options, especially for detached single-family houses.

The first study was co-commissioned by the National Apartment Association (NAA), sponsor of NAA Education Conference & Exposition running this week through Friday at the Georgia World Congress Center in Atlanta. The report projects that based on current trends, an additional 4.6 million new apartment units will be needed by 2030 to keep up with demand as younger people delay marriage, the U.S. population ages and immigration continues.

Continue reading "Elevated Demand for Apts. Expected to Remain Due to Household Formation and Lack of Affordable Housing Options"

Naperville shopping center triples in value after Mariano's opens

 

A Naperville shopping center that lost a Dominick's supermarket in 2013 has generated a huge gain for a Chicago developer that filled the empty space with a Mariano's grocery store.

A joint venture led by Bradford Real Estate has sold Fox Run Square, a 148,000-square-foot property at 1212 S. Naper Blvd., for $78 million to First Washington Realty, a Bethesda, Md.-based real estate investment firm, according to DuPage County property records.

That's more than triple the  $25.6 million price  that the Bradford venture paid for the shopping center in 2014. The price was so low because Dominick's had closed its store, leaving the property nearly half empty. It's so high today because the  Mariano's opened  about a year ago and the shopping center is full.

"What a great buy on their part," Derrick McGavic, managing director of  Newport Capital Partners,  a Chicago-based developer who wasn't involved in the transaction, said of Bradford.

SAFER HAVENS

Though retail bankruptcies, store closings and the rise of e-commerce have fueled  widespread pessimism  about the future of retail real estate, that's not the case of grocery-anchored shopping centers like Fox Run Square.

Investors have been paying up for the properties, which are perceived as a safe haven in the turbulent retail world. The rise of e-commerce is less of a threat to a grocery store than it is to, say,  Sports Authority,  which went out of business last year.

"There is still a truly large investor appetite for that kind of asset, especially on the institutional side," McGavic said.

POPULAR CHAIN

Mariano's are especially popular, generating big returns for developers and investors that have sold properties leased to the supermarket chain. British investment firm IM Properties recently sold three Mariano's stores for  $116.3 million,  40 percent more than it paid for them a few years earlier. IM Properties was also Bradford's joint venture partner in Fox Run Square.

May Real Estate, an Oakbrook Terrace-based brokerage, sold Fox Run Square for the venture.

First Washington owns 92 shopping centers encompassing 12.5 million square feet. Fox Run Square is one of five properties the firm owns in the Chicago area, which also includes Roscoe Square, a 140,500-square-foot Mariano's-anchored shopping center in Chicago's Roscoe Village neighborhood, and Civic Center Plaza, a 265,000-square-foot shopping center in Niles anchored by a Home Depot.

Source: Crain's Chicago Business June 6th, 2017 By ALBY GALLUN

Retail For Sale

365 E North Ave
Glendale Heights, IL 60139


TYPE Retail
SF 6400
BUILT 1988
ACRES 0.70
ZONING B-2
OCCUPANCY 100%
GROSS INCOME $112958
NOI $70693
CAP RATE 7.9%
PRICE $899000

Highlights


  • Fully Occupied
  • High Visibility Center on Busy North Ave
  • Complimentary Retail Tenant Mix

Description


Fully Occupied 6,400 SF 4-unit retail strip center located in Glendale Heights Illinois. Prominent Retail Location on heavily trafficked North Ave corridor between Bloomingdale Rd and Glenn Ellyn Rd with an average daily traffic counts of over 64,000 cars minutes from I-355 NS toll way. Strong demographics with over 100,000 within 3- miles and Median Household Income of $71,971 30% greater than the national average. The center offers a complimentary tenant mix of a long established Miska's Corner Store, Salon, Laundromat and Pita & Kabobz restaurant.

Demographics


1 Mi 3 Mi 5 Mi
Pop 15688 105092 289715
HH 5285 37106 104469
Ave HH Inc $61492 $66238 $68888

Map Overview