E-Commerce Continues to Push Supply Chain

E-Commerce Continues to Push Supply Chain

8.26.2015

E-commerce sales continue to grow—by an estimated 4.2% in the second quarter—while overall retail sales grew just 1.6%, according to the Commerce Dept. Online sales still only make up 7.2% of total sales; however, this shifting in consumer behavior and supply chain usage has retailers and CRE developers rethinking how to reach those powerful consumers. Here’s a look at current trends:

Third-party logistics providers see strong demand due to chanchi_saddle_creek2a_CenterPointges in the supply chain. 3PLs are in big demand right now for transportation, warehousing, and fulfillment services, particularly in the next-day and same-day delivery arena. 3PLs are in the highest demand in dense metro areas like Chicago, New York, Dallas, and New Jersey. Click here for more on where this is headed.

E-commerce boosting sales of traditional retailers as some successfully tap into the supply chains. Big U.S. retailers such as Home Depot, Target, and Wal-Mart are building fulfillment centers to package and ship goods to consumers more productively and profitably. Home Depot and Target saw their online sales grow by 25% and 30%, respectively, in the second quarter. Click here for more.

Westfield renderingBricks and mortar retail redevelops to compete.  Westfield Corp. will spend millions on LA’s Century City Mall to compete with local retailers and the rapid growth in e-commerce. Click here for more on their attempts to make the mall an irreplaceable “lifestyle center” (which cannot be duplicated online). 

Self Storage Market

Chicago

globest longThe self-storage market is at all-time occupancy highs and shows no sign of losing steam, according to GlobeSt. Two large self-storage operators, Public Storage and Extra Space Storage, have seen their occupancy rates increase from approximately 85% a couple years ago to 95.4% and 94.5% this 2nd quarter, respectively.

What does this mean for investors? Investors continue to try to enter the market to meet these record-breaking demands for self-storage units. Click here for more.

Carnegie Hall Goes Green and More

Carnegie Hall Goes Green and More

What’s new this week? We continue to see hot and competitive multifamily markets, shifts towards greener properties, and, of course, a self-storage market that is breaking records.

New York

Carnegie HCarnegie-Hall-300x225all, New York’s famous concert hall that has been in Manhattan since 1891, has achieved U.S. Green Building Council’s LEED Silver Certification. With the help of Siemens, Carnegie Hall has decreased its carbon footprint, reports
Commercial Property Executive
. The project included the following:

  • More efficient and conscious heating, venting, and air conditioning made possible by an APOGEE building automation system
  • Increased natural lighting in the hall by capitalizing on the building’s 450 original windows.
  • Creation of a 10,000 SF rooftop terrace which works to decrease the carbon footprint

Other New York historic buildings with LEED certification? The Empire State Building and the Chrysler Building.

Washington D.C. and All Major Metro Areas

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Millennials: Climbing Walls and Open Space

Millennials: Climbing Walls and Open Space

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Millennials are the hot commodity these days, but what do they want in office space? Scott-Spector, principal of New-York-based architectural firm Spector Group, describes how to appeal to Millennials in workspace design:

  • Amenities. And more amenities—Bring on the fully stocked kitchens, the pool tables and the health clubs in the building.
  • Collaboration spaces –so they can share ideas and work in flexible group arrangements
  • Flexibility—to move desks around, pull up benches, etc.

What NOT to include?

  • Private/enclosed spaces
  • Poor lighting
  • A shortage of free food! (A good salary and an awesome climbing wall are not enough, apparently).

See this story for more on Millennials. And, still more on this topic out of Atlanta.

(Pictured above: an open office in the UK, not affiliated with the referenced articles)

Millennials Are Shaping Multifamily, Office

Millennials Are Shaping Multifamily, Office

Atlanta

Strong multifamily growth supported by urbanization and continued job growth. Atlanta is reflecting the national trend of city migration. Millennials desire long-term renting in the city with access to trendy amenities and nearby city entertainment, and Baby-boomers are following suit. According to a CBRE report, the apartment vacancy rate is 4.8% with a home-ownership rate of 63.4%–the lowest since 1967.  Popular Atlanta submarkets for Millennials and other renters include Buckhead, Midtown, Old Fourth Ward, and Inman Park. Find out more here

Millennials are a target for this Buckhead development in Atlanta

Find out more on this Buckhead multifamily development. 

Orange County

Next-generation office developments are the trend in city centers like Orange County.

Irvine Co. is developing six next-generation office structures. Nicknamed “next-gen” office buildings, these developments intend to balance productivity and efficiency along with modern collaborative features in the workplace—features including cafes, wellness-centers, and other indoor and outdoor activities. The developers say the campuses they are building are not totally unlike college campuses. The “amenities race” is not limited to multifamily. Check it out in this office development story.

Retail: E-Commerce Beyond Amazon?

Retail: E-Commerce Beyond Amazon?

Retailers are following you online—and here’s why that’s good. Forbes’ writer Erika Morphy moves us past Amazon and digs into how technology, such as SmarterHQ, can help online retailers predict buying patterns and serve up online options accordingly. Check out this e-commerce and overall retail story. 

Coastal markets hot for retail investment–As retail rebounds post recession, Real Capital Analytics looks at what markets are hot. Seven of the top 10 are coastal, with Chicago, Dallas and Houston the exceptions. The top? Manhattan, which accounted for 42 percent of the total investment sales. Click here for more. 

 

Supply Chain Update

Supply Chain Update

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Is “freight forwarding” – the job of coordinating shipping for retailers and manufacturers—the next big investment play from Silicon Valley? Apparently so, as investors have poured $1 billion into this sector since 2014. Check out this Wall Street Journal story for details on:

  • Why investors are hot on this sector
  • The rush by companies to become “the next Expedia” of the freight business.
  • What freight forwarders do (Spoiler alert– they find the best way to move those deliveries, coordinating planes, trains, and trucks to get it there quickly.)
  • The movement to infuse high-tech into this space to increase efficiency.
Hotel Investment News

Hotel Investment News

U.S. Hotel Investment: Aug. 2015

Hotels have been hot investments lately. Here’s a snapshot of what’s going on in the market:

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Chicago-area hotel investment sales are strongest since the recession, as increasing occupancies and higher room rates increase hotel profits. As seen in Crain’s Chicago Business, a Kentucky-based affiliate of Colombia Sussex purchased the Marriott Chicago O’Hare for $72 Million this week. The hotel developer’s purchase also included a New Jersey Marriott.

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Hotel Investment extends to Chicago’s suburban hotel market. According to Hospitality Real Estate Counselors, in 2014, there were 26 hotel transactions with a value of $300 million, a 30 percent increase from 2013. In 2015, there has already been 21 hotels sold in Chicago’s suburbs, totaling at a value of $225 million. Recent transactions include the Hyatt Lisle and the Embassy Suites Chicago-Schaumberg/Woodfield. See this
GlobeSt story
for more.
Read more

Office Trends and Investment News

Office Trends and Investment News

From New York to Los Angeles, here are some of the latest office trends and investment news items. 

NATIONAL

Global Logistics Properties is on another buying spree, announcing plans to buy a 100-property industrial portfolio from Industrial Income Trust for $4.55 billion. The assets are in 20 major markets, with many in L.A., Washington, DC metro area and Pennsylvania. See today’s 
GlobeSt. story
 for commentary from Avison Young on why this is happening. 

CHICAGO


Minnnew_dusk01_sm_withCrediteapolis-based Ryan Companies is starting construction on a 31-story, 373-unit tower, 833 North Clark Street Apartments, in Chicago’s Gold Coast. The project will be built on a 41,000-square-foot site that was purchased from U.S. Bank.

 

Chicago office market sees ongoing boost from suburban to city migration. As ConAgra announces plans to move to the Merchandise Mart, GlobeSt talks with Avison Young for a broader perspective on what this means long term to Chicago CRE.

Also…The increased demand for industrial real estate continues. Dallas-based Hillwood Investment Properties, a Perot company, acquired three class A industrial properties totaling 170,000 K SF in Chicago’s Tinley Park. 

NEW YORK


FAO imageThe exceedingly high cost of street-level land in Manhattan leads businesses to seek refuge elsewhere… like underground. This week the famous F.A.O. Schwartz closed down their doors after 29 years in exchange for a less-expensive subterranean, two-story location on Broadway.

Read more

Office Market: Suburb to City Business Migration Here to Stay

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Chicago’s Merchandise Mart continues to draw office market tenants from the suburbs.

7.24.2015

As the news broke of ConAgra’s decision to move from the suburbs to 200K SF in Chicago’s Merchandise Mart, GlobeSt reached out to Avison Young’s Eric Myers for a look at how this will impact the commercial office market. Here’s what he had to say:

  • This office market trend is here to stay–businesses will continue to need young, tech savvy workers and those workers want to be downtown.
  • It’s not just a tech story. Businesses in many sectors need to attract Millennials and are renovating their offices with open spaces and other features to attract young workers.
  • This cycle is much different than the dot.com days–these companies are established and are here to stay.
  • Landlords are investing in building upgrades to entice new tenants–and prepare for shifts in space that will occur when Chicago’s three new office towers start coming online in late 2016 and into 2017.

Check out this CRE trend story for more.