Sears used to rule American retail.
But the troubled retailer’s sales are continuing to decline, falling nearly 14% in the most recent quarter. Shares at Sears Holding Corp. are at a multiyear low, and the brand is continuing to close stores.
The most troubling sign of all?
Sears isn’t trying to get better, Steven Azarbad, chief investment officer at Maglan Capital and an expert in distressed retail companies, told Business Insider.
At a time when real estate investors still have concerns about the future performance of many traditional property types, including office, retail and multifamily, some have started to set aside capital for alternative assets. Such assets, including student housing, seniors housing and medical office buildings, among others, have broad demographic trends supporting their success, proved immune to the recession and offer higher yields than comparable properties in other sectors. As a result, interest in these types of assets is expected to keep growing.
Immediately after the downturn, active investors stuck primarily with the five core property types because they were wary of taking on any level of risk, notes Spencer Levy, executive managing director with CBRE Capital Markets. Yet the cap rates on the best multifamily, office and retail buildings have fallen so low lately that it has become difficult to achieve decent yields. At the same time, investors ranging from REITs to pension fund advisors to private equity groups still have to fulfill their capital allocations to commercial real estate, which is why they are increasingly eager to acquire more specialized properties.
Read the entire article at National Real Estate Investor here.
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Seven years after the financial crisis, private funds in the U.S. are extending their push into traditional banking.
So-called shadow lenders — asset managers that operate outside the banking industry’s regulatory oversight — have been making an increasing number of leveraged loans to midsize businesses.
Demand should dictate lease costs, right? Yes, usually. But this maxim isn’t always true for the data center properties that are operating to host the zettabytes of data—that’s trillions of gigabytes—we’re all punching through with social media and synced business operations.
According to a recent CBRE study, a company looking to lease at a data center will spend $12 million more in one major city than another for the same amount of space. That’s because of variables such as new vs. mature markets, the local cost of power, climate issues, environmental risk, taxes and government incentives. For example, a market with a lot of properties, such as Silicon Valley, costs less to lease in than the up-and-coming Omaha, Neb., market, says Pat Lynch, managing director of CBRE’s data center solutions division.
Read entire article on National Real Estate Investor here.
WASHINGTON, DC—Congress has been trying to change carried interest’s tax characterization for years and in some instances, came rather close to suceeding. More recently, the issue died down — at least on the Hill — as the conversation shifted to comprehensive tax reform.
Last week that message changed.
On Wednesday the Internal Revenue Service quietly proposed a rule that would effectively do what numerous proposed acts and measures could not: ban companies such as private equity firms from converting the management fees they receive from their investors — fees that would normally be taxed as ordinary income — into capital contributions invested in their funds. These are taxed at a much lower tax rate.
Read the entire article on GlobeSt.com here.
Online shopping has increased in popularity with the advancement of technology, but a large number of shoppers prefer the traditional brick-and-mortar store because of the immediacy factor, according to Cushman & Wakefield’s Gene Spiegelman.
“Amazon has been challenged with how to get products to their consumers faster and at a better cost. That’s why they want to develop drones,” Mr. Spiegelman said at C&W’s mid-year Manhattan market overview breakfast on Tuesday. “The retail store is still the best point of distribution from the retailer to the consumer.”
Read entire article at Commercial Observer here.