Editors’ Weekly News Roundup, Dec 5th – 9th
The first full week of December found Connect CRE readers focusing on the macro environment, with four of this past week’s five best-read stories reflecting this interest. Leading the top five was a report from Green Street whose headline reflected a mixture of bad news and good news: Commercial Property Pricing Slips in November, But Valuations Keep Improving.
According to Green Street, commercial real estate pricing overall has declined by 13% over the past 12 months, although the performance of individual property types has varied, both year-over-year and in the past month. At the same time, the firm’s Peter Rothemund said, “While pricing may continue to go down, the large moves should be behind us.”
Green Street data show that the office sector has actually been less affected than most by price declines, but a NAIOP Research Foundation study projects further softening of tenant demand over the next year. The week’s second best-read story, NAIOP Forecasts Further Tapering in Office Space Absorption, predicts that full-year absorption of office space will slow to 8.1 million square feet in 2023—not significantly more than the projected absorption for 2022’s fourth quarter alone. 2024 will see an improvement, though, according to NAIOP.
Walker & Dunlop’s in-house mavens held forth on issues including financing, housing and affordability during the past week’s Walker Webcast. The coverage that Connect CRE provided, Walker Webcast: When Will It End? W&D Experts Discuss Financing Challenges, ranked third among the week’s most-read stories.
These experts—Ivy Zelman, Kris Mikkelsen and Aaron Appel—provided advice on where the smart plays are right now for investment. “The Fed cannot hold rates at a high, high level for an extended period of time, so it’s a waiting game,” Appel said.
Ranking fourth among the week’s top stories was a local story on a national initiative—namely, moves by Unibail-Rodamco-Westfield to significantly decrease its pure-play exposure to U.S. shopping centers. The company is likely to continue selling off some of those centers, but in the meantime, it’s planning to redevelop one of its longest-established properties.
Unibail-Rodamco-Westfield Plans Transformation of Skokie’s Old Orchard Center charts URW’s still-evolving strategy for this 66-year-old mainstay of Chicago-area retail. Whatever form that strategy ultimately takes, it’s likely to include lots of apartments.
Finally, the week’s fifth most-read story examines a potential wave of downsizing that could have repercussions in a number of cities, but most certainly will make an impact on New York City. Job Cuts Return to Wall Street as Deal Prospects Diminish details what may be the beginning of a trend, even if what we’ve seen so far in financial services hasn’t been nearly as deep as the layoffs in the tech sector.