Many aspirational retail brands are in crisis.
Companies like Ralph Lauren, Coach, and Michael Kors have reported disappointing earnings recently. Shares for all three companies have declined in the past year.
Many of the companies’ struggles can be traced back to one mistake: opening too many outlet stores.
Outlet stores sell the labels’ clothing for cheaper than department stores, giving the brands a wider audience.
Because of the ongoing California drought and the statewide water restrictions, commercial real estate owners need to ensure water installations and irrigation systems use recycled water, and prevent water run-off and waste, according to a JLL report.
California’s water crisis and what it means for CRE owners reviews the regulations that were put into place on March 27 and the possible implications as well as water management solutions for commercial real estate owners.
It says that for landlords, incentives can help mitigate the costs associated with replacing lawns, improving irrigation systems and upgrading metering systems to monitor water flow more accurately.
According to the EPA, landscape water use for commercial properties can be as high as 22 percent for office buildings.
Bank of America expects to save 5 million gallons of water by transitioning from traditional landscaping to xeriscaping at six of its banking centers in Southern California.
San Diego Gas & Electric expects its new water-wise landscaping project at Century Park, its Kearny Mesa headquarters, to save the utility more than 4 million gallons of water a year, a 40 percent campus reduction.
So far only two states and around ten major cities have passed laws requiring commercial real estate owners to benchmark and disclose energy efficiency of their buildings. A number of other cities are looking to implement this practice as well so some REIT’s and other commercial real estate owners are considering proactively implementing these strategies with their properties.
A very good article detailing these guidelines including a map of the impacted areas was prepared by Karla Zens and published in the National Real Estate Investor and is available to read here.
Last year, Mortgage Observer and others reported that lenders and investors had turned their eye to a new belle of the ball: retail. As the multifamily sector became overly competitive, many looked to the next most stable asset class and in their minds retail was that.
But that was before the bankruptcies of major retailers, such as RadioShack, that anchor a certain strata of shopping center. Following financial troubles for both J.C. Penney and Sears, malls across the nation have been met with foreboding appraisal reductions. Two major shopping centers— Indian River Mall & Commons, in Vero Beach, Fla., and Village at Main Street Shopping Center, near Portland, Ore.—fell into special servicing this week alone, according to data from Trepp.
The Sierra Vista mall, in suburban Fresno, Calif., was issued an appraisal reduction, from to $40 million, according to Trepp, while the Newburgh Mall, a 388,000-foot facility near Poughkeepsie, in Newburgh, N. Y., got the same treatment, its appraised value slumping to $26 million. That loan is already REO, having not been paid since 2012. The balance on its outstanding 2005 interest-only CMBS loan is $31 million at the moment.
The news on Sierra Vista is even grimmer—its appraised value now sits at $40 million, with a $77 million balance on its 2006 CMBS loan made by Deutsche Bank. It has been REO since August of 2013, the Trepp data show.
Both malls feature Sears, which accelerated plans to close stores across the nation in December and are thought to be filing for bankruptcy soon, as an anchor, while the Newburgh mall also has Office Depot, which has struggled since acquiring its limping competitor Office Max in 2013, as a junior anchor.
And as CMBS loans from 10 years ago come due on some of these assets—once the heart of suburban culture—they are increasingly being sent to servicer. As a large number of maturities come due in the next three years, this seems set to increase, sources tell Mortgage Observer.
Indeed, a panelist earlier this week at CREFC’s High Yield and Distressed Realty Assets Summit, held at the New York Athletic Club, lamented the unwillingness of even CMBS lenders—who generally have more appetite for risk—to refinance malls with J.C. Penney or Sears stores. The panelist, a well-placed executive with a major non-bank CMBS lender, said even malls with anchor tenants that aren’t explicitly in financial trouble, but seem past their prime, like Barnes & Noble, are not financeable.
“I don’t know when the last time was that I was in a book store,” the panelist said.
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Municipalities across the US can now apply for zero-interest loans to develop recycling infrastructure.
The Closed Loop Fund has opened its application process for municipalities and private entities across the country. It plans to invest $100 million over the next five years to support the development of recycling infrastructure and services.
The zero interest loans are repaid from either landfill diversion savings or revenue generated from the sale of recyclable material. Companies that service municipalities may also apply — interest rates will be below market rates.
The founding members of the Closed Loop Fund include Coca-Cola, Colgate-Palmolive, Johnson & Johnson, Keurig Green Mountain, PepsiCo, Procter & Gamble, Unilever, Walmart and Goldman Sachs. It was launched earlier this year at Walmart’s inaugural Sustainable Product Expo to provide municipalities with access to capital to build recycling programs.
The success of the Fund will benefit both the public and private sector, the companies say. Municipalities will be able divert recyclable material away from landfills and into the recycling stream reducing disposal costs, generating revenue, increasing local jobs in the recycling sector and reducing greenhouse gas emissions. Companies will be able to incorporate more recycled content into their manufacturing supply chain, improving the environmental sustainability of products and preserving natural resources.
The types of projects available for financing include curbside recycle carts, curbside organics carts, Recycling facilities (MRF’s), upgrades to MRF’s and anaerobic digesters, among additional infrastructure projects.
The Closed Loop Fund leadership and partners will review applications on a quarterly basis, beginning Oct. 29, and funding will be granted in 2015.
TAMPA, FL—These days, many institutional lenders have no interest in hanging on to problem commercial loans. In fact, special asset departments at many banks are shrinking or, in some cases, even disappearing completely. Instead of servicing problem loans, these financial institutions are focused on selling these loans to capital companies and other investors, typically in large portfolios.
Read the rest of the article at this link