11 Must Reads for the CRE Industry Today (Aug. 18, 2022) - Wealth Management

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WMRE Staff | Aug 17, 2022

60% of Residents Saw Increases in Past Year: Freddie Mac “Of those surveyed, 26 percent reported a rent increase of 10 percent or less and 15 percent reported an increase higher than 10 percent. A smaller percentage (11 percent) reported an increase higher than 20 percent and 6 percent an increase of more than 30 percent. The survey found 40 percent of renters did not get a rent hike in the past 12 months and just 2 percent reported a rent decrease during that period.” (Multi-Housing News)
Target Bites the Bullet “The problem is that even after such decisive moves, Target’s shelves still aren’t quite cleared of excess stock. Inventory levels at the end of the second quarter were $6 billion higher than in the same period in 2019. Of that increase, roughly $3 billion had to do with higher unit costs, while $1 billion to $2 billion was related to ordering merchandise earlier to get in front of a slow supply chain.” (The Wall Street Journal)
Walmart Draws Affluent Shoppers Amid Inflation, CEO Says “Walmart, the nation’s largest retailer, on Tuesday reported better-than-expected results for the second quarter as even middle- and higher-income shoppers came to its stores to try to beat record inflation.” (CoStar)
Inflation Reduction Act Multiplies Tax Benefits For Building Green “The Inflation Reduction Act also modifies section 179D of the tax code, allowing larger tax deductions for commercial property owners undertaking green projects. The deduction has increased from the previous maximum of $1.88 per SF to $5 per SF.” (Bisnow)
Commercial Real Estate Executives’ Perceptions Of Industry Fundamentals Hold Steady Despite Current Market Conditions “The Roundtable’s Overall Q3 2022 Sentiment Index—a reflection of the views of real estate industry leaders—registered an overall score of 44. The Economic Sentiment Overall Index is scored on a scale of 1 to 100 by averaging the scores of Current and Future Indices. Any score over 50 is viewed as positive. The Current Index registered at 38, a 19-point decrease compared to Q2 2022; however, the Future Index registered a score of 51, a 5-point increase from the previous quarter, reflecting leaders’ optimism in future conditions.” (Real Estate Roundtable)
When CRE Sellers Are No Longer King “At some point when the market leverage changes, and we enter into a more buyer-oriented market, sellers should be prepared for buyers to push back on some of these current market provisions. These are some of the first provisions that buyers will most likely attempt to push back on and negotiate.” (Commercial Property Executive)
Building Materials Costs Growing at Astonishing Rates “Inflation has taken a toll on consumers, but the overall cost of building materials continues to not just grow, but to do so at astonishing rates. According to the National Association of Home Builders and its analysis of government data in the form of the producer price index, or PPI, the price of building materials was up another 0.4%, not seasonally adjusted.” (GlobeSt.com)
Are Offices Really Prioritizing Health and Wellness? “Dr. Matt Trowbridge with the International WELL Building Institute joins host Michael Bull to discuss strategies for making built space healthier and attracting talent back to the office, benefits of the WELL process, and future trends in office wellness.” (America’s Commercial Real Estate Show)
The rise and fall of Bed Bath & Beyond: Once one of America’s most beloved big-box retailers, it’s now on the brink “We took a closer a look at Bed Bath & Beyond’s rise from a small linen store in New Jersey to a major national retail chain now on the brink of collapse.” (Insider)
Rick Caruso in spat over CBS Television City expansion “In a letter to neighbors, the Grove and the Farmers Market expressed ‘profound concern’ about the plan for overhauling Television City, calling it a ‘massively scaled, speculative development which, if approved, would overwhelm, disrupt and forever transform the community.’” (The Real Deal)
As China’s Economy Stumbles, Homeowners Boycott Mortgage Payments “The boycotts are part of the fallout from a worsening Chinese economy, slowed by Covid lockdowns, travel restrictions and wavering confidence in the government. The country’s economy is on a path for its slowest growth in decades.” (The New York Times)