Nine Must Reads for the CRE Industry Today (Aug. 31, 2022) - Wealth Management

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WMRE Staff | Aug 30, 2022

Commercial Property Funds for Small Investors Face Tougher Regulation “An association of state securities regulators is poised to step up restrictions on a popular way for individuals to invest in commercial real estate, saying the investments are more costly and risky than many unsophisticated investors realize. The North American Securities Administrators Association is considering new policies that would establish limits on how much an individual can invest in the funds and other new rules.” (The Wall Street Journal)
Data Centers Are Unpopular. All the Better for Their Stocks. “Data centers have been in the headlines for all the wrong reasons. Yet controversy about how much they tax cities’ power grids may turn out to be a good thing for the companies that own them. As with e-commerce warehouses, demand for space in data centers skyrocketed during the Covid-19 pandemic as more of daily life moved online. However, the stocks haven’t been as good an investment. Over the past year, shares in U.S. data-center players returned minus 9% including dividends, compared with 5% gains on average for listed warehouse companies such as Prologis. Over a three-year period, they have underperformed logistics stocks and the S&P 500 index.” (The Wall Street Journal)
Private Real Estate Retreats as Construction Costs Soar “Property investors are backing away from development as the energy crisis and rising interest rates exacerbate cost increases.” (PERE)
Why Industrial Outdoor Storage Is the New Hot CRE Type “Industrial outdoor storage has gone from being a niche in the industrial sector often owned by small private investors and mom-and-pop operators to a market estimated at $200 billion. During the past three years, IOS has been growing dramatically and increasingly attracting the attention of—and significant outlays—from institutional investors and private equity firms.” (Commercial Property Executive)
First Solar Announces New U.S. Panel Factory Following the Inflation Reduction Act “First Solar announced Tuesday that it will build a new solar panel manufacturing facility in the U.S. on the heels of the Inflation Reduction Act, which incentivizes domestic manufacturing. The company will invest up to $1 billion in the new factory, which it plans to build in the Southeast of the U.S. The newly announced plant will be the panel maker’s fourth fully integrated U.S. factory.” (CNBC)
Why Lawyers Are Leading the Return to Office Race “What happens when three equity partners and a junior associate in a law firm walk into a conference room? They leave with a renewed appreciation for the office. At least, that was the experience of Phil Appenzeller, CEO of Dallas-based firm Munsch Hardt Kopf & Harr. That moment, which was before his firm mandated a companywide return, crystallized why he feels in-person work is still critical for lawyers, even in the era of work-from-home.” (Bisnow)
Berkadia Optimistic Apartment Deal Will Pause Will End After Labor Day “It’s still August and Berkadia has already established its second highest volume year in the company’s history. That helps to give it strong credentials when it comes to identifying trends in multifamily housing investing. The company has released results from its 2022 Mid-Year Powerhouse Poll, which finds the sector enjoying strong rent growth tailwinds until recently being moderated by rising interest rates and inflation.” (GlobeSt.com)
Hollywood Complex Leased to HBO and Showtime Hits the Market “The Lot on Formosa features more than 540,000 square feet of soundstages, offices and production space.” (Commercial Observer)
Panera Pilots AI at the Drive-Thru “Panera Bread’s latest technology innovation is artificial intelligence (AI)-enhanced drive-thru ordering. The fast-casual restaurant chain is testing AI technology from OpenCity in drive-thru lanes at select stores in the greater Rochester, N.Y. area. The pilot stores, in Greece and Webster, N.Y., have implemented OpenCity’s proprietary voice AI ordering technology, called ‘Tori’, for drive-thru orders.” (Chain Store Age)