Commercial Real Estate Week in Review
Posted by: encon commercial real estate services | October 5th, 2013
llenrock.com Eric Hawthorn
Week in Review for September 28-October 4:
After House and Senate lawmakers fail to agree on a federal budget, the U.S. government is forced to shut down for the first time in 17 years, halting all nonessential federal services. Congress’s partisan stalemate is triggered by some House Republicans attempt to defund the Affordable Care Act, also known as Obamacare.
On the West Coast, an increasing amount of foreign capital flows into commercial real estate opportunities in Silicon Valley. Chinese investors are increasingly attracted to investment properties in the area, which enjoys high real estate demand due to its thriving technology sector.
In Phoenix, AZ, at a lodging conference appropriately called The Lodging Conference, industry experts discuss the recovery of the hotel real estate sector, which was badly hit by the recession. Analysts project hotel values will continue to increase through 2016, though rising interest rates may slow this improvement, reports Hotel News Now.
In Philadelphia, City Council resolves to sell a number of abandoned school properties on behalf of the Philadelphia School District. The city plans to pay the beleaguered district $50 million, then sell off the district’s many vacant school buildings until it earns back this $50 million, reports Curbed Philly.
Also in Philadelphia, local super-developer Bart Blatstein of Tower Investments argues that his proposed casino development, Provence, offers greater benefits than the plans of competing developers. The Pennsylvania Gaming Control Board has yet to award the city’s second and last gaming license to a prospective developer.
Empire State Realty Trust (NYSE: ESRT), whose holdings include the Empire State Building, makes its public debut. The REIT raises $929.5 million in its IPO, reports Bloomberg. This IPO had been stalled for some time by legal battles with some of the Empire State Building’s legacy investors.
However, the Wall Street Journal reports that nontraded REITs are also extremely popular among yield-hungry investors, though regulators warn that these REITs offer less transparency than their publicly traded counterparts.
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