Triangle NC Commercial Market Strong

Great article in the Triangle Business Journal on the strength of the market down here in North Carolina, particularly in office and industrial. From the article: The Triangle’s office, industrial and retail property owners and tenants haven’t seen a real estate market this active in years. The vacancy rate for office space in the second quarter remained unchanged at 14.2 percent overall and at 8.9 percent for Class A space despite the market adding nearly 678,000 square feet of new office space with four new buildings finishing construction in the quarter. In retail, owners and developers of the top grocery store chains are falling all over themselves trying to secure sites and start constr

Public non-listed REITs continue strong acquisition course

Non-traded REITS continue to acquire properties and make investments – and the trend seems to be strengthening. From the article: Non-traded REITs had a strong year for investment in 2014, and they’re on track for an encore. According to SK Research’s “Non-Traded REIT Market Intelligence Report,” which was released in August, non-traded REITs have a hearty appetite for acquisitions. In 2014, they acquired $21 billion in core commercial real estate. According to Real Capital Analytics Inc., investment volume totaled about $9.3 billion in the first quarter. Assuming a strong finish, non-traded REITs are likely to match or exceed last year’s acquisition totals. In the early going this year, spo

Commercial Real Estate Shines Amid Increased Volatility

Commercial real estate is a great hedge during volatile markets like those we have been experiencing this week. Whether the stock market is up or down 3, 4, or 5% means very little to the myriad of tenants that we have in place - whether they be neighborhood retail and service businesses, long standing medical practices, or apartment dwellers who are paying their rent each month on time. The value of a well managed building or shopping center is little impacted by the day-to-day noise in the markets. Of course diversification is important, and owning a basket of equities is a great long term way to build wealth, but real estate returns also compound over time as rents are collected and the

Medical Office Space Demand Increasing

Great article today on the rising demand for medical office space - something that PGP has been noticing as well. We are closing up a deal on a pair of medical condos in Delaware, and are actively looking for more deals in the space. From the article: More demand has led to more development. Marcus & Millichap estimates that construction completions this year will hit 8.8 million sq. ft., significantly higher than the 7.1 million sq. ft. delivered in 2014. The vacancy rate in the MOB sector is currently at 9.7 percent, representing a drop of 20 basis points over the past 12 months. “Deliveries are still way below where they need to be, given the number of new insureds in the system,” Smelte

Strong Retail Fundamentals Persist

Good read on how the continued lack of new development in the retail space is leading to lower vacancies and higher rents for owners of shopping centers. This sort of market dynamic has been one of the reasons we are bullish on retail space in general - particularly well positioned neighborhood centers that are priced attractively and that have a nice mix of service based tenants. From the article: With shopping center vacancies continuing to tighten as retailers slowly fill the remaining excess space and developers adding little in the way of new shopping space, retailers are facing a dwindling number of high-quality locations with available space to accommodate expansion or new store openi

Apartment REITS selling more than buying ...

Good article that discusses the fact that MAA (a large multi-family REIT) is selling more apartments than ever before in their 21 year history. Clearly the cap-rates in the multi family space are making it more attractive for these guys to be sellers rather than buyers. This reinforces our viewpoint that a rotation out of multi family and into office and retail assets is underway. We continue to see high quality office and neighborhood retail (which is really space occupied by small medical and service companies) with cap rates in the 8 to 9 percent range, vs. the 5.50 percent cap rates in multi family. From the article: “We’re selling more properties this year than we’ve ever sold as a p

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