Camille Renshaw is the CEO and co-founder of B+E, the first tech-driven brokerage and trading platform for net lease real estate. Launched in December 2017, they now have offices in New York, Chicago, San Francisco, Atlanta, Denver and Tampa, and their trading platform consists of user-friendly dashboards, real-time predictive pricing and an AI-driven exchange -- all leveraging the largest data set in the industry. Buyers and sellers can conduct entire transactions online, reviewing real-time credit, news and tenant data while they trade, much like online stock trading platforms.

In May 2018, B+E announced an exclusive partnership with Inland Real Estate and RCX Capital Group. Leveraging AI, B+E brokers can now sweep the national net lease market, reviewing all on-market properties, and criteria match on a 1031 exchanger’s behalf; the exchanger can then run their entire exchange through the B+E platform using specialized dashboards that makes the process simpler and more transparent.

In December 2018, B+E launched the first 1031 online trading platform at the ICSC New York Deal Making Show. The B+E 1031 Trade platform empowers exchangers to review the market for all net lease properties, both on-market and off-market. The proprietary system then utilizes user defined criteria to match properties and name and purchase replacement properties.

In May 2019, B+E brokered the largest commercial real estate transaction by a digital platform with the $324 million Cabela’s sale-leaseback. The eleven Cabela’s properties represented more than 1.6 million square feet of space and an additional 277 acres of land.

Prior to B+E, Camille was Head of Sales for Ten-X (a Google Capital company), a leading online marketplace for commercial real estate with products such as Auction.com. Prior to Ten-X, she founded the Stan Johnson Company’s New York office where she led their sales team as its top producer for five years. Before this, she was Director of the US Capital Markets division of Colliers International and a Top 40 Worldwide Producer. Renshaw originally entered commercial real estate as an owner, after founding Dyzco Technologies and successfully selling it to American Financial Services Corp, Inc.

Camille has established herself as an industry leader, making frequent speaking appearances, authoring articles and being quoted extensively by a number of leading publications, including Wired, The NewYorker, The Wall Street Journal and GlobeSt.com. She was recognized as a “Woman of Influence” by Real Estate Forum, and named one of “NYC’s 15 Women to Watch in Real Estate” by Sokol Media. In 2021, she was named one of the “Best Bosses in CRE” by Real Estate Forum and nicknamed “The Cataylst.”

She is currently an Executive in Residence at NYU Stern School of Business, and an Advisory Board Member for Rutgers University’s Big Data Program. She also serves as Advisor to DreamIt's UrbanTech Accelerator.

·        How have you adapted to the current economic environment?

·        How did the pandemic affect CAP rates, credit ratings, and pricing of your traded properties?

·        What do you see the future markets in the net lease investment space?

The U.S. Center for Disease Control and Prevention extended an eviction moratorium until June this year due to coronavirus, while regulators launched probes into whether renters have been improperly kicked out of their residences.

CDC Director Dr. Rochelle Walensky signed an order last week extending the suspension until June 31, 2021 just days before it was set to expire at the end of this month. The move bars landords from evicting tenants who can’t make rental payments amid the pandemic.

 

President Biden asked the CDC to extend bans on evictions and foreclosures shortly after his inauguration, in a bid to mitigate the dual economic and health crises spurred by Covid-19, which has left more than half a million Americans dead, and millions more unemployed and deep in debt.

Source: Crain's New York

In the coming days, Vernell Stewart is set to realize one of her lifelong dreams. Her business, Sweet Tea Factory, is preparing to open its first physical location after eight years of selling tea online, distributing to grocery stores and with a mobile beverage truck.

The tea shop is scheduled to open this weekend in a kiosk at the Tanger Outlets mall in Savannah, Georgia, while it builds out a 1K SF retail space in the mall Stewart plans to open June 1. Stewart, who also works in retail branding and product design, didn't secure the deal for her first location by consulting a real estate broker or online property listing marketplace.

She landed the deal on Clubhouse, a growing social media app that is quickly becoming a valuable deal-making tool for commercial real estate professionals.

"I never even thought or considered that an app would bring about great opportunities like this," Stewart said. "This right here has been phenomenal. If you could strike all deals like this, that would be perfect."

Clubhouse, a social networking app that launched last year, allows people to meet new contacts and discuss shared interests through a series of audio-only chat rooms.

The rooms function similarly to a conference panel or online webinar, with a moderator and a handful of speakers discussing an agreed-upon topic, and a virtual room full of listeners who can click a hand-raise icon to ask a question or share their opinion.

The app is currently only available on the iPhone, and it requires new members to be invited by an existing user. But Clubhouse CEO Paul Davison said in a town hall meeting Monday the app plans to launch on Android phones and ditch the invite-only model "in the coming months," Business Insider reported. After launching on the iOS App Store in September, Clubhouse had reached 12.7 million downloads as of last week, Social Media Today reported.

In January, Clubhouse raised $100M in a funding round led by renowned Silicon Valley investment firm Andreessen Horowitz that valued the company at $1B, Axios reported. It gained more attention in early February when eccentric billionaire Elon Musk spoke on the app, and it has continued to build momentum as a networking tool for a variety of industry sectors, including commercial real estate.

Of the 10 Clubhouse-using commercial real estate professionals Bisnow spoke with for this story, most said they spend at least an hour every day on the app. They said they have met a host of new contacts, and in many cases secured new deals to grow their businesses.

Some commercial real estate professionals have used platforms like Twitter and LinkedIn to grow their networks for years, but they say Clubhouse is more valuable because its audio-only format allows them to have candid, meaningful conversations with their peers.

The app has also created a way for industry newcomers to advance their careers, because the Clubhouse users who have built the largest followings are not the ones with the most experience or the most recognizable names, they are the ones who have the most interesting things to say.

“You can’t fake it on Clubhouse," said Natalie Wainwright, a Las Vegas-based tenant broker who is also active on Twitter. "You either know your craft, you know your market or whatever the topic is, or you don’t. There’s no time to bullshit. There’s no editing. There’s no redoing. It’s your call to the carpet, and what you say either lands or it doesn’t, and I love that element.”

Beth Azor, a retail real estate investor in South Florida, organized the Clubhouse room where Stewart connected with Tanger Outlets. The room, which she named Space Tank and modeled after TV's popular Shark Tank, allowed retail businesses to pitch their concepts to an audience of landlords.

She has hosted the Space Tank room twice and said she has made over 50 matches between landlords and businesses, though not all of them have turned into deals like the Sweet Tea Factory lease. Azor joined the app on Dec. 30, spent the holiday weekend exploring its rooms, and she said it has only gotten better over the last three months.

"The more of the commercial real estate community that got on, the better, because we were able to start doing business together, and that's why I'm still on it," Azor said.

Azor has also landed new business for herself on Clubhouse. Through the app, she met New York developer Beatrice Sibblies; she flew up this past weekend to meet with the BOS Development founder about partnering on a development deal in New York City, something Azor has hoped to do for years.

"I had this interest in New York before Clubhouse because I believe there's going to be opportunity there," Azor said. "Now I get on Clubhouse and find [Sibblies], and I'm like, 'This is my woman,' and my idea that I have maybe wouldn't have come to fruition because I didn't have the right partners."

Sibblies described this weekend's meeting with Azor as "very productive," but the two declined to provide details about what they are working on. Sibblies said Azor was the first Clubhouse contact who has flown from a different city to meet with her, but she has had meetings with multiple New York-based professionals she met through the app.

She said the app is especially valuable for her because she develops across a variety of different property types, and Clubhouse can help her learn more about the sectors she is looking to enter. Sibblies, who focuses on the Bronx and Harlem, said she is planning her first hotel project, and she has learned about the sector and made important hotel contacts through Clubhouse.

"What I like about Clubhouse is it allows you to network beyond your geographic neighborhood and beyond your silo," Sibblies said. "Because I am multi-asset class, it is extremely helpful ... I've never seen a networking tool like this."

With in-person events limited during the coronavirus pandemic, Clubhouse has provided a new way for commercial real estate professionals to grow their networks, something that has been especially valuable for newcomers to the industry.

CBRE associate Kelani Blackwell joined the brokerage firm in February 2020, her first job in commercial real estate after working for a residential firm that flipped houses. She joined Clubhouse in November, and she now has over 23,000 followers.

A multifamily investment sales broker based in Columbus, Ohio, Blackwell said she has secured multiple clients through Clubhouse, and her team has deals in the works with the new clients to sell a 200-plus-unit property and a 150-acre development site. (She declined to provide further details on the deals, which haven't closed.)

"Clubhouse has been instrumental for me because I joined CBRE three weeks before a pandemic," Blackwell said. "The world shut down, and I'm tasked with trying to create a book of business from behind a computer screen, which is tremendously hard, and Clubhouse has played a huge, instrumental role."

She said Clubhouse can be helpful for women and people of color in the industry to grow their network and advance their careers.

"It helps you feel a lot less siloed," Blackwell said. "There are only so many diverse brokers and developers in the CRE space, so when you actually meet these folks, it's validating that you're not the only person experiencing the things you're experiencing."

Blackwell leads a club on the Clubhouse app called Women in Real Estate that has over 5,000 members. She hosted a room Tuesday in partnership with Sabrina Bier titled "How Real Estate Professionals Are Using Clubhouse."

During the hour that Bisnow tuned into the room Tuesday, more than 140 people joined, and more than a dozen people spoke about their experience with the app, including professionals across the U.S. and in the U.K. and Nigeria. Speakers discussed how Clubhouse can help them share ideas, make new connections, support people in the industry and empower diversity.

Bier, a longtime residential real estate broker who now works for Proper Title, a title insurance agency in Chicago, said she has been hosting the "How Real Estate Professionals Are Using Clubhouse" room every week since January, and she partnered with Blackwell's club to increase its visibility.

She said the room is meant for residential and commercial real estate professionals to learn how to best utilize the app, and she plans to continue hosting it every Tuesday at 9 a.m. EDT.

"There are so many people that join it and still don't even use it," Bier said of Clubhouse. "I want to keep it consistent so that people always have a place to go when they decide they want to start utilizing it."

Bier said she has made two personal investments in residential deals in Chicago with people she met through Clubhouse, and she has heard many other people tell stories about securing deals through the app.

"I've engaged in two different investment opportunities with relationships I've built via Clubhouse in three months, and I would never have met those people it if wasn't for Clubhouse," Bier said. "Every time I mention that in these rooms, there's always people that chime in and say they have, too."

Wainwright, a former Cushman & Wakefield broker now with Logic Commercial Real Estate, has 1,500 Clubhouse followers and leads a club called #CREFAM. She said she uses Clubhouse to share experiences with other commercial real estate professionals, and also to meet executives in other sectors, such as technology, who need real estate brokers.

She said she has landed three new clients through the app, including two that are looking to relocate from Los Angeles to southern Nevada. One of them flew to Las Vegas in late February to tour the market with her, she said, just nine days after they had met on Clubhouse.

When she downloaded the app in January, she never expected it would land her new business. 

"I didn't think that I would have such meaningful connections, and I didn't think it would actually impact my real world," Wainwright said. "Somebody bought an airline ticket to my city because of Clubhouse, because of a friggin' app. That's crazy to me."

All of the real estate professionals Bisnow spoke with for this story said they see Clubhouse as a valuable tool to build their networks, but some noted that it can be distracting and time-consuming.

Himmel + Meringoff Properties Director of Acquisitions Andrea Himmel said that a majority of the conversations she sees on the app aren't relevant to her day-to-day business, so she tries to be judicious about how she uses her time on Clubhouse.

"My thoughts are 99% of it is noise," Himmel said. "The remaining 1% of people that's not promotional, self-appointed gurus — call it 10 people I've connected with since I joined three weeks ago — of those 10 people, I guarantee you I will do a deal with at least one of them."

Colliers Senior Vice President Coy Davidson, a Houston-based broker who amassed a 32,000-person following on Twitter before joining Clubhouse in January, said it is important for users to be careful with their time on the app.

"It can be such a time-consuming thing because it's audio, people are taking turns talking, so you can get on there and next thing you know you eat up an hour quickly," Davidson said.

Davidson said he has been impressed with how many high-level executives he has seen on Clubhouse.

"It's definitely growing, and there are a lot of people in CRE that are active on Clubhouse that I don't see active on Twitter and LinkedIn," Davidson said. "There's been a lot of principals of major shopping center developers or REITs, some people you have an opportunity to network with that you might not get an opportunity to on another social platform."

Prominent executives who have participated on Clubhouse, according to people Bisnow spoke with and a review of public accounts, include Cardone Capital CEO Grant Cardone, Starwood Capital CEO Barry Sternlicht, Massimo Group founder Rod Santomassimo, Invictus Development Group President Christopher Senegal and Avison Young principal James Nelson.

Miami Mayor Francis Suarez participated in a Clubhouse room Monday in an effort to attract investors and businesses to the city.

Blackwell said she has participated in rooms with Josh Childress, a former NBA player who now leads a Los Angeles real estate company, and Tobias Harris, a current Philadelphia 76ers player whose brother invests in real estate.

Ackman-Ziff President Simon Ziff, a prominent New York broker who joined Clubhouse in January, told Bisnow in an email he thinks it has the potential to become a valuable tool for the industry.

“I think it could be helpful for the commercial real estate industry if enough relevant people use it, but that hasn't happened yet, perhaps if LinkedIn buys them or develops a comparable feature," Ziff wrote. "My most interesting experience so far was when I was stuck in traffic last week after 11 p.m., and I had a 'place to go' to hang out. You’re never alone anymore."

Part of what has made Clubhouse a valuable networking tool for the commercial real estate professionals Bisnow spoke with was the intimacy of having a relatively small number of people on the app, and some worry about what could happen when it becomes flooded with millions more users.

Yoni Miller, co-founder of South Florida-based commercial real estate lender QuickLiquidity, hosts a clubhouse room every weekday at noon that often runs more than two hours. He said some of his rooms have garnered over 200 listeners, and they allow him to meet people with whom he otherwise would have trouble connecting.

"Especially right now because it's early on, it's an amazing time to be a host," Miller said. "I don't have a big following on LinkedIn, but I can still get people to show up. I think that's because Clubhouse is newer and there's so much demand for content ... I do believe over time, as you get more audience you are going to see more rooms dominated by people with bigger followings."

Blackwell said it is easier to network in smaller rooms, and she thinks that could be more difficult as the app grows.

"I do believe that what has made the app valuable, your ability to network, is hindered when a room is too big and not enough people get to speak," she said.

Sibblies said she thinks the app is more valuable to her now than it will be next year.

"The reason that people who have become early adopters spend so much time on it is because the return on time is likely to be greater in the first quarter of 2021 than the first quarter of 2022," Sibblies said. "The perception is that there's going to be an exponential increase in usership, so the ability to make contacts will be more difficult a year from now."

Source: Bisnow

The U.S. hotel sector won’t fully recover from the pandemic until about 2025. But some segments are coming back much faster than others.

In 2020, U.S. hotels suffered the greatest loss in occupancy levels in 2020 since the Great Depression, according to a fourth quarter report from real estate services CBRE. Annual occupancy dropped by an average of 41.6 percent. Revenue per room (RevPAR) was down 55.5 percent compared to 2019 figures.

Luxury and upscale chain hotels experienced the greatest deterioration in property fundamentals during the year, with occupancy down 65 percent on an annual basis and nearly 72 percent in the last quarter of 2020. Lower tier hotels posted less severe declines in occupancy, but still remained below 50 percent.

Value-priced hotels, especially those in the extended stay category and featuring kitchenettes, continued to operate during the pandemic and served as second homes for many medical and emergency services personnel who lived there to avoid infecting family members with COVID-19, notes Scott Berman, principal at consulting firm PwC and industry leader for hospitality and leisure with the group.

“The hotel industry’s short ‘lease’ structure and dependence on recurring business and leisure travel left it particularly exposed to the shelter-in-place mandates and the economic shock than ensued,” says Rachael Rothman, CBRE head of hotels research and data analysis.

She suggests, however, that just as the decline in the sector was sudden and steep, recovery could surprise to the upside. “We are seeing steady improvements in occupancy levels, travelers passing through TSA, and the highest level of net airline tickets purchased in months,” Rothman says. “The pace of the recovery will largely be dependent on the pace of the vaccine rollout, and the amount of flexibility in large corporations’ travel budgets.”

Kevin Mallory, global head of CBRE Hotels, a global services platform focused on the hotel and leisure-lodging sectors, also feels optimistic about the sector’s recovery. CBRE Hotels’ expectation is that as the certainty about the U.S. economic recovery and exit from the pandemic improves, investors will become more aggressive, especially in the hardest hit segments of the hospitality industry, where the best deals could be had.

Mallory says that lender interest and a tremendous amount of equity chasing hotel deals are fueling the current uptick in investor and seller action. He notes that a number of major investment firms, including Blackstone, Starwood, Brookfield and Softbank’s Fortress, have established funds to target distressed hotel deals.

“A record amount of equity was raised to invest in the hotel sector under the theory that there would be widespread distress and the ability to purchase quality assets for a significant discount to their pre-COVID valuations,” adds McGaughy.

So far, “Durable and attractive assets are trading within 10-15 percent of 2019 values,” according to Mallory. He notes, however, that non-durable and less desirable assets have and will continue to trade at steeper discounts of between 25 and 40 percent.

For example, the 310-key Royalton Hotel, Embassy Suites in New York’s Garment District, sold in September 2020 for $115 million, or 41 percent below the $195 million the seller, Ashford Hospitality Trust Inc., paid for it 18 months prior.

McGaughy notes that in the early stages of the pandemic significant distress opportunities were certainly expected, as loan delinquency in the sector shot up by double digits in June 2020. But the massive wave of distress everyone anticipated never came about.

“There’s likely to be some discounting, but no rapid deceleration in values has occurred,” says Berman, who adds that there is strong sponsorship behind many hotel portfolios.

Instead, according to McGaughy, a scarcity of available product on the market has led to increased competition and strong value recoveries nearing pre-pandemic levels.

Mallory believes the shortage of available properties for sale will reverse itself as hotel owners complete debt workouts with lender and place properties on the market later this year.

In the meantime, McGaughy says that many of the investors that were seeking distressed opportunities are now focused on acquiring high-quality hotels, with a keen eye towards assets in drive-to resort destinations, which proved resilient throughout the pandemic.

Source: Wealth Management

Property distress is easing with pandemic recovery in sight. Dash for deals and record dry powder help lift property price.

Investors with a record hoard of money to finance distressed commercial real estate are finding themselves in a tough spot: There’s nowhere to spend it.

The massive wave of defaults expected after the coronavirus shuttered offices, hotels and stores last year has so far failed to materialize. Now, as the U.S. economy swings from pandemic lows to a vaccine- and stimulus-induced rebound, the window of opportunity for discounted deals is closing before it ever really opened.

That may sound like positive news to most Americans, but to a select group of investors who anticipated raking in big profits from the misfortunes of others, it’s a problem. Troubled properties aren’t coming to market because owners have little pressure to sell. Commercial real estate prices have held up -- or even risen -- because so much money is chasing so few deals.

“We’re starting to see frustration rolling over into desperation,” said Will Sledge, senior managing director in the capital markets unit of brokerage Jones Lang LaSalle Inc. Investors are “willing to push prices up and their yields down in order to simply deploy capital.”

U.S. private equity funds stockpiled more than $250 billion for commercial real estate loans as of March 23, according to Preqin. That included a record $75.8 billion for distressed debt, a figure that grew in response to last year’s eruption of late payments on properties.

Fundraisers continue to rake in commitments. Cerberus Capital Management closed a $2.8 billion opportunistic real estate fund Monday, exceeding an original $2 billion target. Oaktree Capital Management said last week it raised $4.7 billion real estate opportunities fund, surpassing its $3.5 billion goal.

The cash piles may increase even more. Almost 30% of institutional investors are targeting distressed and opportunistic commercial real estate deals this year, nearly double the early 2020 share, according to a new survey by CBRE Group Inc.

“With all the capital out there, there’s going to be a bit of a ‘Three Stooges’ effect,” said Jim Costello, senior vice president of real estate data firm Real Capital Analytics. “They’re all running through the door at once but nobody can get through.”

U.S. private equity investors have record dry powder for property debt deals.

 

Now, troubled properties are in recovery mode as vaccines liberate people to travel, swarm shopping centers and return to offices. Consumer spending is forecast to grow 6.1% in 2021.

“This isn’t the point at which borrowers are giving up after they have carried their properties through this tough period of time,” said Jonathan Pollack, global head of Blackstone Group Inc.’s real estate debt strategies group.

Jones Lang LaSalle evaluated $24 billion in potential debt deals last year, and only about $1.4 billion came to market, according to Sledge. Distressed debt pools have traded in a range of 85 cents to 95 cents on the dollar, he said.

Yaakov Zar, chief executive officer of Lev, a matchmaker for commercial real estate borrowers and lenders, got a call from a friend offering 100 cents on the dollar for loans in default.

“If you’re paying par, it’s not distressed,” Zar said. “Even in a situation where everything was falling into default, there’s still too much dry powder.”

 

There will still be distressed opportunities as some building owners struggle to refinance or decide to stop investing in money-losing projects. And some properties, such as malls, face longer-term consumer shifts that will be difficult to overcome. But a post-Covid distress tsunami isn’t in the cards, said Brian Stoffers, global president for debt at CBRE.

“Those that anticipated the big hits are going to be sorely disappointed,” Stoffers said.

For distressed-fund managers, the clock is ticking. Most closed-end funds have two or three years to call the money they’ve raised or lose the right to put it to work. Not all can wait that long to meet payrolls and other expenses.

Stockdale Capital Partners has until December 2022 to deploy a $550 million fund it closed in February of last year, according to Dan Michaels, managing director of the Los Angeles-based private equity real estate firm, which focuses on distressed opportunities in the U.S. Southwest. It might have to ask investors for an extension.

“You look at 1,000 deals,” Michaels said, “Find a 100 you like. Work on 10. Close on one.”

With few deals coming to market, fund managers are turning to more obscure corners for opportunities. One potential source is banks that want to clean up their balance sheets to be attractive for mergers, said Pat Jackson, CEO of Sabal Capital Partners in Irvine, California, which has originated $4 billion in real estate loans.

Sabal has been in talks with a regional lender since December about purchasing a multihundred-million-dollar debt portfolio while the bank prepares for an acquisition. The challenge is making an offer that pleases the seller while leaving room for Sabal to profit, Jackson said.

“You bid on a deal and it’s ‘Congrats! You won!” Jackson said. “And then you think: Did I pay too much?”

Source: Bloomberg

KEY POINTS

·        Demand for industrial, big-box facilities — warehouses or distribution centers of 200,000 square feet or more — hit a record in North America last year, according to commercial real estate services firm CBRE.

·        The pace of e-commerce growth will likely slow in 2021, as people feel comfortable shopping at stores again, but real estate executives say industrial space will remain a hot market.

·        Gap, Williams-Sonoma and Home Depot are among the retailers that recently announced plans to open new warehouse spaces or distribution centers as more of their businesses shift online.

The next big industrial warehouse might find itself on top of a former golf course. Or in an empty office building. Maybe in a vacated shopping mall.

The Covid pandemic has accelerated e-commerce sales globally, with digital sales driving a larger portion of retailers’ and grocers’ businesses. That has sparked a race for warehouse space and caused companies to seek creative commercial real estate alternatives as they strive to fulfill online orders and avoid delivery delays.

Demand for industrial, big-box facilities — warehouses or distribution centers of 200,000 square feet or more — hit a record in North America last year, according to commercial real estate services firm CBRE. It was the strongest performer among all industrial real estate. Transactions for those spaces totaled 349.3 million square feet in 2020 across the top 22 markets, a nearly 25% jump from 2019, according to CBRE.

The pace of e-commerce growth will likely slow in 2021, as people feel safe shopping at stores again. But real estate executives say industrial space will remain a competitive market.

“We’re really just seeing the tip of the iceberg as far as demand and growth of e-commerce,” said Mindy Lissner, a CBRE executive vice president. “Once you start it, you figure out how easy it is to order things online.”

“The pandemic has had a huge impact on the growth of demand of warehousing and fulfillment,” Lissner added. “But it was already growing anyway. ... And the trend is going to continue.”

With a hot market and supply of industrial space running thin, businesses and their brokers in a land grab are having to get creative.

How about an old golf course? Amazon recently found a shuttered 18 holes in the town of Clay, New York, to build a $350 million distribution center. It’s also plotting a fulfillment center on top of a portion of a former golf course in Alcoa, Tennessee.

The e-commerce giant also has taken old and defunct malls, of which there are plenty in the U.S., and turned them into warehouse spaces. Like the old golf courses, old malls are often situated in communities full of paying customers, which makes the land suitable for distribution facilities looking to be near people’s homes. But developers still face hurdles like rezoning.

Vacant office buildings are becoming an attractive target to flip into warehouse space, Lissner said. She said many have convenient locations and sprawling campuses, just off a highway. More office space could end up on the market, especially if businesses extend remote work policies after the pandemic and need less space for employees’ cubicles.

Experts also point to a pivot away from sprawling warehouse facilities in the middle of nowhere toward spaces closer to customers. In some cities, such as New York, that has inspired companies to build up rather than out. Some have moved into multistory buildings that have been converted into vertical warehouses in outer boroughs and neighborhoods like Long Island City.

“Our customers are preferring more expensive real estate,” said Chris Caton, managing director of global strategy and analytics at Prologis. “They’re no longer going out into really remote locations, like Columbus or Indianapolis or Memphis. Instead, a lot of that demand, and in particular the rent growth in our business over the last decade, has been focused in major 24-hour cities.”

Prologis, a real estate investment trust that owns warehouses and is Amazon’s biggest landlord, estimates that for every $1 billion in sales, e-commerce companies require 1.2 million square feet of distribution space.

The need for industrial space has been especially high among discount retailers like Burlington, TJ Maxx and Ross Stores; home goods and home improvement stores like Wayfair and Home Depot; and meal-kit companies and grocers, Lissner said during a CBRE virtual event.

But the demand is seemingly everywhere you look.

Gap announced in February a $140 million investment to construct a distribution center in Longview, Texas, as part of its effort to double its online business over the next two years. Upon completion, Gap said the 850,000-square-foot facility will be able to process 1 million packages per day. Initially, it will be used for Old Navy’s burgeoning e-commerce business, then expand to other parts of Gap’s business.

Williams-Sonoma recently told analysts it plans to increase its manufacturing and distribution capacity by 20% to 30% over the next year, including adding about 2 million square feet to the company’s distribution-center network.

Home Depot earlier this year opened a 1.5 million-square-foot distribution center to fulfill online and store orders in Dallas.

For those grocery and food businesses, space can be even harder to find. They need special cold-storage facilities where they can keep perishable items, which are pricier and more limited than a typical warehouse that holds apparel or electronics. Real estate executives from CBRE and JLL say demand has grown for those as more Americans cook at home and order their weekly groceries online.

Shares are up about 15% over the past 12 months for Americold, the only publicly traded temperature-controlled warehouse owner in the U.S., in part because of storage requirements for Covid vaccines.

Unlike retail real estate, where rents have been pressured because demand isn’t what it used to be, prices for industrial real estate are still climbing.

Craig Meyer, president of JLL’s Americas industrial division, said “aggressive leasing” among retailers has caused vacancy rates to drop and rents to rise.

“We’re actually concerned about the availability of product beginning in the middle of the year,” he said.

Industrial rents, as a national average, hit $6.47 per square foot in February, up 5.1% year over year, according to data from the real estate tech firm CommercialEdge. New leases signed for the month commanded a 14.7% premium, averaging $7.42 per square foot, the group said.

“On the industrial side, prices are higher than I’ve ever seen in my 30 years,” Lissner said. “I mean, much, much higher than any prediction.”

Source: CNBC

KEY POINTS

“We believe that cryptocurrency is here to stay,” Caruso founder and CEO Rick Caruso told CNBC.

The real estate firm invested in bitcoin and will begin accepting it as payment for rent.

“It’s not about the next year or five years,” Caruso said, but rather a long-term bet on crypto.

Billionaire Rick Caruso’s eponymous real estate company is jumping into the world of cryptocurrency, announcing Wednesday it will begin accepting bitcoin as rent payment at its residential and retail properties.

The privately held firm said it also has invested a portion of its corporate treasury in bitcoin and entered into a partnership with Gemini, the cryptocurrency exchange and custodian led by CEO Tyler Winklevoss.

“We believe that cryptocurrency is here to stay. We believe that bitcoin is a right investment for us,”

Caruso said in an interview Wednesday on CNBC’s “Power Lunch.” “We’ve allocated a percentage of what would normally go into the capital markets into bitcoin.”

The moves from Caruso’s Los Angeles-based company represent the latest institutional adoption of bitcoin, which is seen as one factor helping the world’s largest cryptocurrency soar in price in recent months. Bitcoin was trading just below $56,000 per coin Wednesday, up from around $11,000 apiece in early October, according to Coinbase.

Tesla earlier this year bought bitcoin using cash on its balance sheet, and the Elon Musk-led company later began to accept it as payment for its electric vehicles. Jack Dorsey’s Square also has purchased bitcoin for its corporate treasury.

There’s also been movement from Wall Street firms. Morgan Stanley was the first big U.S. bank to announce it would provide access to bitcoin funds for its wealth management clients, CNBC reported last month. The private wealth management group at Goldman Sachs also is expected to soon offer its clients investment vehicles for bitcoin and other digital assets.

Caruso’s properties include outdoor malls The Grove in Los Angeles and The Americana at Brand in Glendale, California. The Americana also has luxury apartments.

While consumers will eventually resume activities they paused during the Covid pandemic, Caruso told CNBC the health crisis will lead to some fundamental behavior changes. “The companies that win their loyalty are going to be the companies that anticipate those changes and meet the consumer where they are, and that’s what Gemini is helping us do,” he said.

“Cryptocurrency is going to be part of any 21st century retail and real estate experience,” said Winklevoss, who appeared alongside Caruso on “Power Lunch.” Winklevoss and his twin brother, Cameron, are high-profile early crypto investors and hold bullish long-term views on bitcoin.

Caruso offered up one example he could see playing out involving cryptocurrency and the company’s consumer rewards.

“Our loyalty program, what I envision in working with Gemini and the Winklevosses, is you will earn coin. You will earn a cryptocurrency,” Caruso said. “You can use that cryptocurrency on the blockchain then to spend at our properties. Check into our resort. When you live with us, pay your rent. We create this whole ecosystem.”

Some critics of bitcoin have questioned its current price, as well as its utility as a means of transaction. Given its classification from the Internal Revenue Service, there are also tax implications of using bitcoin to make purchases.

Caruso said his company’s entrance into crypto is part of a long-term bet. “It’s not about the next year or five years,” he said. “We’re looking forward to the next decade.”

Source: CNBC

JPMorgan Chase plans to “significantly reduce” its global office requirements while reconfiguring layouts, chairman and CEO Jamie Dimon wrote Wednesday in his annual shareholders’ letter. However, the bank—New York City’s largest private-sector office tenant—nonetheless intends to build its new Midtown Manhattan headquarters, which will house 12,000 to 14,000 employees.

 

With up to 10% of its employees shifting to remote work permanently, “Remote work will change how we manage our real estate,” Dimon wrote. “We will quickly move to a more ‘open seating’ arrangement, in which digital tools will help manage seating arrangements, as well as needed amenities, such as conference room space.”

 

Dimon’s letter, issued as part of the bank’s annual report, followed published reports last month that Chase was looking to sublease large blocks of space in Manhattan, totaling nearly 800,000 square feet.

 

Source: Connect New York

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