Commercial Real Estate Headlines for August 12, 2019
Check out the latest in deals and development in commercial real estate for Aug 12, 2019:
- Yardi Matrix Releases Bullish Report on Office Sector: Strong demand for U.S. office space and “a supply pipeline that shows no sign of slowing down” is boosting average asking rents and lowering vacancy rates, according to a new report from Yardi® Matrix. Average asking rates increased 1.7% over the six-month period ending in June 2019, matching office-using employment sectors’ year-over-year growth rate that month. The national vacancy rate was 13.5% in June, 20 basis points below the previous month. The report documents 26.5 million square feet of office space delivered year-to-date and 174.7 million square feet currently under construction. Office sales totaled $38.8 billion through June and “the decline of the 10-year Treasury yield should continue to act as a catalyst for transactions,” the report says. Half of all space under construction is in six top gateway markets—Manhattan, N.Y., San Francisco, Washington, D.C., Boston, Los Angeles and Chicago—and growing tech markets Seattle, the Bay Area and Austin, Texas.
- New York Times Signs 15-Year Lease in Long Island City: The New York Times Company has signed a 15-year lease for three full floors at Court Square Place in Long Island City, Queen, which encompasses 57,846 square feet. The Times has been expanding its workforce in recent years and now plans to relocate 350 employees from its headquarters building at 620 Eighth Ave. in Manhattan to the new location. The deal brings Court Square Place to 100% occupancy. Robert Mitchell of Byrnam Wood represented The New York Times Company in the transaction. JRT Realty Group represented the property’s ownership, the United Nations Federal Credit Union.
- Freddie Mac Multifamily Midyear Outlook Projects Robust Rental Market, Higher Origination Volume: The Freddie Mac Multifamily 2019 Midyear Outlook projects a robust rental market and strong multifamily volume growth in 2019. The rental market remains well positioned to absorb new supply due to vacancy rates continuing to beat out projections and rent growth remaining above the rate of inflation, according to the report. This strong growth along with low interest rates put originations on pace to grow by 8% over 2018. Freddie Mac released a companion video and viewpoint with the report. Multifamily originations are expected to set another record year in 2019 due to strong fundamentals, continued demand for multifamily investments and low interest rates.
- Greystone Provides $6.5 Million in Freddie Mac Financing for Multifamily Property in New Jersey: Greystone, a leading commercial real estate lending, investment, and advisory company, has provided a $6.5 million Freddie Mac Small Balance Loan (SBL) to refinance a 53-unit multifamily property in East Orange, New Jersey. The transaction was originated by Jason Yuen in Greystone’s New York office, on behalf of Rockledge Clinton LLC. Red Oak Capital Advisors arranged the financing for the borrower. The $6,500,000 financing is a non-recourse adjustable rate mortgage with a fixed rate for five years and a 30-year amortization period. Built in 1927, 49 South Clinton Street is a four-story, elevator building comprising one-, two- and three-bedroom apartments, with on-site laundry and parking.
- Novak Construction and Target Embracing Digital Era as the Retail Footprint Gets Smaller: By January 2020, Novak Construction will have completed over 125 projects for Target Corporation. The majority of these projects have been remodels within prototypical store locations as the customer experience is reformatted and refined. Nearly all 2019 Target openings are small-format. As 2020 nears, Novak is preparing to construct two additional small-format Target locations; in Champaign and Mayfair (Chicago), IL. Once known as “TargetExpress,” these stores are 15% the size of a traditional Target, now averaging 17,000 square feet. From a building standpoint, “We are now constructing smaller aisles, installing fewer registers and fewer shelves to accommodate products sold in smaller packages and geared towards customers using public transportation,” says Jim Hempleman, Novak’s Project Director. “These ‘Grab and Go’ stores are generally situated around college campuses or densely populated urban areas where large chunks of real estate are not easy to find.”