Investors in multifamily commercial real estate expect to purchase more properties in 2020, with a majority looking to secondary and tertiary markets for opportunities, according to a recent survey of the industry conducted by Capital One. About 74% of the 105 professionals surveyed indicated they would be buyers next year and about 40% said they expected greatest investment potential to stem from those smaller markets. However, not all feedback was rosy. Respondents raised concerns about the effects of overregulation in the sector, saying initiatives like rent control would dampen commercial real estate investments. Sixty-three percent of respondents expect rent control to impact primary markets, with 45% saying it would somewhat reduce their investments and 18% saying it would drastically reduce their investments. (Commercial Property Executive)
Street-level retail is having a renaissance in Las Vegas, traditionally a casino-fed retail real estate market. The city retains its title as a global destination with 42 million visitors annually and retail developers are pushing into the market, which feels poised to win as retail becomes more experiential. Zack Hussain, a senior associate with CBRE in Las Vegas, told The New York Times that, “In the past, the safest bet was to be in the casino, because that’s where the traffic was and having that identity with the casino made sense. But today, street-front retail is thought to be best, and the biggest challenge on the Strip is meeting the demand for space. We’re starting to see some gentrification of street-front properties.” Bolstering the transition are the reduced rent costs compared to major tourists cities like New York. According to JLL, average retail leasing costs range from $250-$350 per square foot in Las Vegas, compared to $1500 to $1800 per square foot in New York City’s Time Square. Another impetus for the evolution is (as usual) the millennial generation, which is showing less inclination to gamble, experts said. (The New York Times)
To deal with allegations of a “pay-to-play” political environment in the city of Los Angeles, the city council has passed new rules that would bar real estate developers from making political contributions while their projects are in the entitlement process, which oversees land use and development approvals. The restriction covers contributions to the city attorney, mayor’s office and city council and also applies to donations made by property owners and senior executives of development companies. Critics said the news rules lack breadth and could be moot in application because they don’t apply to subcontractors and don’t prevent donations to independent expenditure committees. The rules are set to take effect in 2022. (Commercial Observer)
More News to Note:
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CRE Investors Assess Tampa Bay Retail: More Grocery Stores, Pop-Ups Making Inroads
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