“If you don’t read the newspaper, you’re uninformed. If you read the newspaper, you’re misinformed.” Mark Twain
Year’s Most Important Commercial Real Estate News as Determined By CoStar Readers
By CoStar News Staff December 23, 2015
CoStar’s award-winning journalists covered the biggest stories in commercial real estate in 2015, providing timely reporting and insightful views on the major trends and transactions that shaped the industry throughout the year. In addition to covering the biggest deals, financings and major new developments, CoStar News kept a particular focus on the consolidation trend sweeping through the brokerage business.
Here are the stories that you, our readers, considered to be the most interesting and newsworthy in 2015:
The biggest news in 2015 occurred in early May when DTZ confirmed an audacious deal to buy rival Cushman & Wakefield from Exor, the investment company of Italy’s billionaire Agnelli family. DTZ’s private equity backers led by TPG Capital, which had just combined Cassidy & Turley and DTZ the previous year, chartered a course to create one of the world’s largest global real estate services companies, enlisting Brett White, the former CEO of rival CBRE, as chairman and CEO of the combined company.
The transformative deal closed in early September, with the combined firms operating under the Cushman & Wakefield banner. The news further stoked the mergers and acquisitions front, with the following stories all attracting a great deal of reader interest:
- Colliers, Brokerage Rivals Capitalize On Disruption from Cushman-DTZ Mega Merger to Bulk Up Local Market Share
- What a CBRE-Johnson Controls Combination Could Mean
- FirstService Planning to Spin Off Colliers as Separate Public Company
- JLL Bulks Up by Adding Apartment Financing Provider Oak Grove Capital
- Battle At the Top: What a Merged Cushman/DTZ Holds in Store for Global CRE Services
Without a doubt one of the biggest stories of 2015 was the surge in investor demand for commercial property. By almost every measure, commercial property sales soared as a host of buyers snapped up almost everything on the market, taking advantage of continued low interest rates and good news on the economic front. None were more active than Blackstone. The private equity investment giant was involved in a series of blockbuster deals throughout the year, ranging from its $8 billion acquisition of BioMed Realty Trust; to a $4 billion deal for Strategic Hotels to its partnering with Canada-based pension fund manager Ivanhoé Cambridge on the $5.3 billion Deal for Stuyvesant Town; before closing out the year with a $2 billion deal to buy an apartment portfolio from Greystar and $1.9 billion to buy RioCan’s 13 million-square-foot U.S. shopping center portfolio.
Blackstone was also one of the major buyers involved in GE’s decision to sell off $26.5 billion in real estate assets in a bid to refocus on its core industrial manufacturing businesses. The sell-off qualified as the largest sale in the commercial property market since Blackstone’s acquisition of Equity Office Properties Trust in 2007 for $39 billion, including mortgage debt.
Throughout 2015, several publicly traded REITs capitalized on the strong market to sell large amounts of property and restock their coffers with money for new acquisitions. Among the numerous REITs that revamped their portfilios in 2015 were Sam Zell’s Equity Commonwealth Real Estate Trust (NYSE: EQC); global warehouse real estate leader Prologis Inc.(NYSE: PLS); Duke Realty’s blockbuster agreement to sell a 6.9 million-square-foot suburban office portfolio to Barry Sternlicht’s Starwood Capital Group in a joint venture with affiliates of Vanderbilt Partners of Chicago and Trinity Capital Advisors of Charlotte for $1.12 billion; and Brookfield Asset Management’s plan to sell stakes in nearly $2 billion in office assets.
Reports on the strengthening office market were among the most popular articles CoStar published in 2015. With vacancies falling and rents rising in growing numbers of submarkets and slices within the U.S. office sector,demand for office space is expected to remain at post-recession highs for the next year, according to CoStar Portfolio Strategy analysts forecasting the office market’s performance.
Meanwhile, market analysts and investors alike were astounded at the ongoing rental demand for apartments, which continued to show resiliencein the face of hundreds of thousands of new units delivered to the market.Even as many ‘first-movers’ were tempted to cash out their multifamily investments during the year, the apartment market got a further boost in areport issued by the Mortgage Bankers Association (MBA) that projected between 13.9 million and 15.9 million of additional households will be formed by 2024.
Many readers were jolted by the news of Walgreens making a play to buy rival Rite Aid in a $17.2 billion buyout. Despite the recent track record of regulators blocking mergers among major retailers, the real estate implications of a merger among the top retail drug store chains would be enormous. The example of Office Depot, which saw an acquisition bid from Staples blocked, shows that real estate strategies continue to be a top concern for retailers.
The ongoing saga of struggling department store chain Sears Holding Corp. entered a major new chapter in June when it commenced the rights offering for Seritage Growth Properties, a new REIT the cash-strapped retailer plans to spin-off ownership of more than 200 stores to shareholders and joint venture partners. The REIT transaction involved the sale and leaseback of 235 Sears and Kmart stores, as well as the retailer’s 50% interests in 31 of its mall-based stores held in joint ventures with Simon Property Group Inc., General Growth Properties Inc. and The Macerich Co. Under terms of the master leases with Sears Holdings and the joint ventures, Seritage has the right to recapture space from Sears Holdings,giving the REIT the right to reconfigure and rent the recaptured space to third-party tenants over time.
A common theme for much of 2015 was that of retailers wrestling with the pros and cons of spinning off their corporate-owned real estate into REITs.Pressured by activist investors, several household names made headlines with their ‘will they? won’t they?’ decision. In addition to Sears, McDonalds explored going the REIT route before deciding against it. And Macy’s continues to weigh the best options for its stores.
The for-profit university industry took a direct hit in 2015 after the U.S. Dept. of Education issued revised rules for federal student financial aid. DeVry University and Corinthian College were among those that announced plans to close a number of locations or wind down operations altogether.
That’s a wrap of the most-read news we reported in 2015. Many thanks to our audience of CoStar subscribers. Your support is greatly appreciated and we look forward to bringing you all the big stories and major developments in commercial real estate throughout 2016.
http://www.costar.com/News/Article/The-Year-In-Review-Commercial-Real-Estate-in-2015/178419?rpt=1
FROM ME:
Phoenix Commercial Real Estate and Investment Real Estate: investors and Owner / Users need to really know the market today before making a move in Commercial Properties or Investment Properties in Phoenix / Tucson / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land in Phoenix / Tucson / Arizona. Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties.
I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also international. Click here to find out what is a CCIM: https://en.wikipedia.org/wiki/CCIM
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Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
walterunger@ccim.net 1-520-975-5207
Check out my professional profile and connect with me on LinkedIn.
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Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
2821 E. Camelback Rd. Suite 600
Phoenix , AZ 85016
Direct: 520-975-5207
Fax: 602-865-7461
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