Northeast Real Estate Business

NOV-DEC 2015

Northeast Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Northeast United States.

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Page 1 of 64 November/December 2015 • Volume 12, Issue 2 THE PORT EFFECT The Northeast industrial sector continues to experience strong fundamentals driven by growth in the ports and logistics markets. By Lindsey Walker Marcec N ortheast Real Estate Business and Shopping Center Business re- cently held their annual New York Retail Roundtable at the Man- hattan offces of law frm Goulston & Storrs. This year, our participants were bullish about retail appearing in new areas, the strong performance of the new projects that are coming on- line in the area and neighborhoods seeking retail. They had concerns over higher rents, especially in Manhattan, where many landlords' expectations have grown higher than many retail- ers can sustain. Attending this year were: Deborah Jackson, Cushman & Wakefeld; Nina Kampler, Kampler Advisory Group; Stephen Stephanou, Crown Retail Ser- vices; Patrick Breslin, Colliers Inter- national; Danielle Brunelli-Albrecht, R.J. Brunelli & Co.; Frankie Campi- one, CREATE Architecture; Richard Cohan, 34th Street Partnership; Vic- tor Menkin, Menkin Realty Services; Joseph French, Institutional Property Advisors (IPA); Andy Graiser, A&G see RETAIL page 54 NEW PROJECTS, HIGHER RENTS In the New York area, panelists see new projects, areas with more retail activity and higher rents. Moderated by Randall Shearin see INVESTMENT page 48 Optimizing Older Properties page 40 INSIDE THIS ISSUE Successful Refnance: Start Early page 47 Tenants have the Upper Hand in Stamford Offce Market page 38 New Jersey Retail Market Sees Continued Strength page 28 F oreign capital worried about un- rest and economic uncertainty across continents is sustaining a U.S. property investment binge that shows no signs of relenting. The threat of a recession in China along with the yuan's devaluation has increasingly fueled an Asian appetite for U.S. real estate amid expectations that the asset class provides a safe harbor. Similarly, Canadian, Norwe- gian, Japanese, Middle East and other foreign investment managers are at- tracted to a U.S. economy that, while trudging along, is healthy relative to conditions in other global markets. In the Northeast, direct foreign in- vestors shelled out $11.7 billion for of- fce buildings, apartments, hotels, re- tail properties, industrial facilities and land in the frst eight months of 2015, according to Real Capital Analytics, which tracks deals of $2.5 million or more. That was about $1.3 billion less than the same period in 2014 even as total investment sales remained fat at nearly $69 billion in the Northeast. Direct foreign buyers targeted the bulk of their activity in New York City, investing $10 billion in the market in the frst eight months of 2015 versus $8 billion over the same period last year, according to Real Capital Analyt- ics. Foreign buyers tapped Boston to a lesser degree, directly acquiring about $1 billion of the $10 billion in com- mercial real estate that traded hands CROSS-BORDER BUYERS STILL HUNGRY FOR U.S. PROPERTIES Foreign capital is particularly bullish on New York, even as sales slowed in the summer. By Joe Gose Kuafu Properties, a developer and investment manager backed by Chinese capital, has contracted to buy One MiMA Tower, 151 luxury rental units in the top 13 foors in Related Cos.' 63-foor mixed-use project at 460 W. 42nd Street. Kuafu plans to convert the units to condominiums. Photo courtesy of Related Cos. E ast Coast ports and surround- ing industrial markets have seen increased activity this year and last, and all signs point toward con- tinued growth. While the opening of the Panama Canal expansion next year is expected have a slight impact, other factors are fueling the majority of activity for ports and logistics in the Northeast. Growth & Risk Mitigation Last year, the East Coast ports expe- rienced rapid growth, a whopping 7.6 percent volume increase compared to 3.2 percent on the West Coast. In the Northeast, the Port of New York and New Jersey — the largest port on the East Coast and the third largest in the country — saw its fair share of the pie: The port handled a record volume of more than 5.7 million 20-foot equiva- lent units (TEUs), marking a 5.6 per- cent increase over the previous year. While economic expansion and ris- ing levels of international trade con- tributed to this growth, experts attri- bute the uptick, in large part, to the labor dispute between the Pacifc Mar- itime Association (PMA) and the In- ternational Longshore and Warehouse see INDUSTRIAL page 51

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