NAREIM
Acquisitions and Asset Management Summer Meeting
Leave
it to the National Association of Real Estate Investment Managers’ President,
Gunnar Branson, to run events that get people thinking outside the box. At this week’s Acquisitions and Asset
Management meeting, he brought in a keynote speaker who bills himself as an
‘Ethical Hacker.’ Nicholas Percoco of
Trustwave Holdings spoke about some of the ways confidential information gets
stolen. It was an eye opening and
somewhat frightening discussion. I must
share with you what I found to be the most outrageous piece
of information.
Nick
advised that we keep our mobile phones turned off (as in completely ‘powered off’)
when in meetings. Apparently, malware
(malicious software) can be downloaded into the phone - without your knowledge
- and allow remote activation of the phone’s microphone. Someone looking to get confidential information
can actually record the conversation without even being there!
When
I heard Nick talk about this, I thought, “How crazy is that???” I was grateful
to have heard this talk at the NAREIM Summer meeting.
Real Capital Analytics (RCA) US Capital Trends May
2013
Where
are you investing your money these days?
Going along with the trends or venturing out from the pack? Some of the discussions at the NAREIM
meeting this week (see article above) centered around the on-going challenge of
buying properties at the ‘right’ price and then executing an asset management
plan to generate the level of current income that investors seek.
With the kind permission
of RCA, please allow me to share some of their May 2013 highlights from the US
Capital Trends report.
Hotel
Sales of significant hotel properties in May totaled $1.1billion, down 12% versus last year. This is the first year-over-year decline in the hotel sector in 2013.
Hotel cap rates, averaging 8.0% nationally, remain well above the other
property types and have stabilized in recent months.
Apartment
Sales of significant apartment properties totaled $4.9 billion in May
representing a 27% decline from a year ago.
Despite the slowing sales trend, cap rates trended lower in May, down
approximately 10 basis points to a national average of 6.0%.
Retail
Sales of significant retail properties in May
totaled $3.2 billion, down 15% year-over-year. The declines were similar
across most retail subtypes as well as portfolios and individual property
transactions.
Cap rates on retail acquisitions have been relatively stable with the national
average for retail property still above 7.0%
Industrial
Sales of significant industrial properties in May were the highest so
far this year, totaling $3.8 billion,
up 43% compared with 2012.
Average cap rates on industrial acquisitions have increased over recent
months and may be influenced by both a greater proportion of distressed sales
in April and May and the growing trend of increasing investments into secondary
and tertiary markets.
Office
Sales of significant office properties surged forward in May totaling $8.0 billion, up 68% measured against 2012. The gains were broad-based across both
the CBD and suburban sectors.
Cap rates on suburban properties have exhibited inward movement in
recent months while CBD yields have been relatively stable with the national
average cap rate for all office properties still above 7.0%.
Only time will tell if what appears to be
the ‘right’ price today will result in realizing the pro forma profit down the
road.
Gmail
‘Undo’ Setting
Following
last week’s column I received a thoughtful and enlightening email from a
long-time OTR reader and thought I would share:
“Gmail does have an ‘undo’ setting
– click on the settings icon in the upper right hand corner (the gear), then
settings, and labs. I think all it does is delay the sending of your
email a few minutes so you can stop it before it leaves Gmail. Once the
email leaves Gmail server, there is no way to undo it.”
Pizza / Drink Thing
- construction game
We
played a very colorful game Monday night at the Summer Pizza / Drink Thing in
New York City. Everyone seemed to have fun.
Thank you all for your active participation!
Below
are photos of the three construction projects with a brief description of each.
CONGRATULATIONS
again to Table 1! Well done!
Table 1: Bad Bank Condos. A LEED (Leadership in Energy and
Environmental Design) Platinum,
fully accessible building with private entrances and a water feature.
Table
2: Bicycle repair shop with many
"spare parts." They even got
the bike inside the building!
Table
3: Rehabilitation/meditation center for
overworked commercial real estate executives with an outdoor pool and natural
cliff waterfall. Great use of the Lincoln Logs for benches!
We had
fun watching everyone play Monday night, and in the planning process as well. While
preparing for this game on my ‘patio’ across the street from where I live,
there were lots of smiles from those walking by as people watched adults playing
with their toys. It’s amazing how a
little playtime can clear one’s head.
‘Shop for a Cause’ to Support Music Education
As many of you know, music has played a very important part in
my life. Let me introduce you to the non-profit organization Education Through
Music. ETM partners with New York’s inner-city
schools to promote the use of music as a means of enhancing students’ academic
performance and general development.
When you purchase a $5
Macy's saving pass from Education Through Music, 100% of the money received will
support ETM's wonderful work! (Even if you don't use the pass - your $5 will
still go to ETM).
Macy’s 8th
annual ‘Shop for a Cause’ savings pass is good for use on Saturday, August
24, 2013 at any Macy's store (You’ll save 25% in many of their
departments!).
Feel free to pass this
along to family or friends who may be interested in supporting ETM’s work, or
who just like to shop! Thanks.
To purchase a pass online, please visit.
Correction
A member of the OTR
community pointed out the correct spelling of that fabulous toy store - FAO
Schwarz. My apologies to toy store
lovers everywhere!
You Touch Me
Something special occurs when I travel from
conference to conference and meet OTR readers for the first time. I can’t tell
you how fabulous it is to hear that something published in my column resonates
with you.
What I have found so interesting over the years is
that the majority of emails I receive back are about the ‘other stuff’ I write
about - the similar experiences we have traveling down the road of life together. I continue to cherish this
relationship that we share.
Summer Breather
For the first time since the birth of this
column in 1999 I’m taking some time off to recharge my batteries. Thank you for your continued encouragement and
support.
Have a safe July 4th holiday and enjoy the
month. See you back here in August!
Don’t forget the
sunblock!
Congratulations
Conor Flynn promoted to
Executive Vice President and Chief Operating Officer at Kimco Realty.
Zach Kayce, 2013 Graduate of
the Johns Hopkins Masters of Science in Real Estate program, has joined Clarion
Partners in Multi-family asset management.
On The Road
Sept.
15 – 17: NAREIM Executive Officer Fall
Meeting, New York, NY
Oct. 23 – 24:
PERE Summit, New York, NY
Disclaimer
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and graphics is not intended to malign any religion, ethnic group, club,
organization, company or individual. Steve Felix makes no
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site or other information as a result of following any featured link to or from
this site. The intention of this blog is to do no harm in regards to
injury, defamation or libel. What is written or shown is not to be taken as fact
or absolute. Steve Felix will hold himself harmless for any errors
or omissions in this blog’s information; including but not limited to external
link information, translation or interpretation of content or incorrect grammar
or punctuation.
