REIT I Economist Expect Continued Improvement in Commercial Real Estate

Fundamentals in the commercial real estate industry are expected to improve significantly over the next three years, according to a recent survey of economists and analysts from real estate organizations.

The Urban Land Institute (ULI) noted that equity REITs are projected to post double-digit returns in 2013 and 2014 in its recently released ULI/Ernst & Young Real Estate Consensus Forecast for April 2013.
Calvin Schnure, NAREIT’s vice president of research and industry information and contributor to the semi-annual survey, explained that underlying this favorable performance is an expectation that GDP growth will re-accelerate to 3 percent or more in 2014 and 2015. This rebound comes after slowing slightly in 2013, due to the federal sequester and fiscal cliff deal. The unemployment rate is projected to move down steadily over the next few years, to 6.5 percent in 2015.
“The overall economy continues to improve, despite bumps in the road like the recent government sequester,” said Schnure. “The recovery in commercial property markets is still in the early stages, with lots more upside than downside risks.”

When it comes to individual sector returns, the survey noted that multifamily will likely continue to lead the way, but with other sectors not far behind.

Schnure said that conditions are expected to stay tight in multifamily housing, with vacancy rates remaining at or near their current low levels. He added, however, that rent growth is expected to decelerate, especially as the single-family housing market rebounds. Single-family housing starts are projected to rise from 535,300 in 2012 to 700,000 this year, and reach 1 million by 2015.

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Re-posted by: Crosbie Real Estate Group


QSR Magazine I A Quick-Serve Rebound?

Dickey's Barbecue Pit enjoyed the best growth among quick service restaurants.Technomic report shows strong growth for some chains in 2012.

In a sign that the economic landscape might finally be rebounding for quick serves, early results from Technomic’s upcoming “Top 500 Restaurant Chain” report reveal that the fastest-growing limited-service restaurant chains in the U.S. realized average sales increases of 22.3 percent between 2011 and 2012.

Dickey’s Barbecue Pit was the fastest-growing quick-service chain, enjoying a sales increase of 46.5 percent to $249 million, along with unit growth of 40.4 percent. Firehouse Subs sales spiked 33.5 percent to $380 million, followed by Jersey Mike’s Subs (26.3 percent to $348 million), Raising Cane’s Chicken Fingers (26 percent to $260 million), and Jimmy John’s Gourmet Sandwich Shop (24.6 percent to $1.27 billion). Chipotle (a 20.2 percent sales increase to $2.716 billion) was not far behind.

“For most of these chains, it is not a change in what they are doing; it is what they have been doing successfully year after year,” says Mary Chapman, director of product innovation for Technomic. “Regional chains that are doing well are able to get high-quality financiers, and then are able to grow quickly.”

Read more: QSR Magazine: A Quick-Serve Rebound?
Re-posted by: Crosbie Real Estate Group

Smarter Planet: How Economy and Analytics are Driving Jewelry Sales

ImageJewelry sales are set to shine this year and expected to grow more than 11 percent in the second quarter and nine percent overall this year, according to a new Big Data-based retail forecast from IBM.

According to the analysis, improved consumer confidence, lower unemployment and enhanced stock dividends from the fourth quarter of 2012 have combined to leave people ready to start spending on luxury items again, like jewelry.

In addition, key retailers are buttressing the economic landscape and driving sales by leveraging Big Data analytics to better understand and respond to customers and trends. Sterling Jewelers, for example, which owns the popular Jared and Kay brands, overhauled its digital channels to better respond to changing consumer preferences. The move led to an increase in online sales of 49 percent this past holiday season.

Sterling commissioned IBM for research that included a customer segmentation analysis, voice of the customer surveys and in-store observations. With deeper insights into customer needs and distinct shopping scenarios – as well as the capabilities required to support them online – they were able to extend the Kay and Jared in-store shopping experience online and into the mobile channel.

Read more: How Economy and Analytics are Driving Jewelry Sales
Re-posted by: Crosbie Real Estate Group