Market Data

Regional Outlook

South

Orlando’s Big Deal

Location, location, location convinced Hyatt Hotels Corp. to buy its sixth hotel in the Orlando market — the Peabody Orlando adjacent to the Orange County Convention Center. Hyatt purchased the 1,641-room hotel for $717 million cash from UST Hotel Joint Venture Ltd. in October. The deal gives Hyatt an instant convention presence in the nation’s second-largest hotel market and is expected to bring in before-tax earnings of $55 million in 2014 according to the Wall Street Journal. Unfortunately the Peabody ducks that parade through the lobby every day were not included in the deal.

North

National

Conversion Trend Aloft

The opening of Aloft Tulsa in the former city hall in Tulsa, Okla., exemplifies the hotel brand’s new growth strategy: converting older urban buildings. Hotels are opening in rehabbed structures in Orlando, Fla., Tampa, Fla., Miami, Detroit, Calgary, Alberta, and Atlanta in the next two years. Those join converted properties already opened in San Francisco, Silicon Valley, Calif., Nashville, and Tucson. The brand is aiming for 100 hotels worldwide by next year, according to Simon Turner, Starwood Hotels & Resorts’ president of global development. Geared toward a younger generation of travelers, Aloft views adaptive reuse as in keeping with millennial’ ideals. “Adaptive reuse projects aren’t just an expedient way to bring more Aloft properties online quickly; they’re also a way to expand sustainably, and merge Aloft’s urban aesthetic with historic structures,” he said. “For the next generation of traveler, how we grow Aloft is just as important as where we grow Aloft."

Walmart Scales Down

Walmart is happy enough with the performance of Walmart Express pilot stores to consider greenlighting the format nationwide, according to Bill Simon, president and CEO, in recent remarks. The 20 pilot express formats range between 10,000 sf to 15,000 sf and offer groceries, pharmacy, and gas, competing directly with drugstores, dollar stores, and small grocery stores. Simon also said that Walmart is increasing the number of Neighborhood Markets, a 40,000-sf grocery format that features fresh produce, from 300 to 500 in the next 18 months. “This is one of the fastest-growing formats in retail,” he added.

East

Pittsburgh Industrial Snapshot

“Second-quarter industrial vacancy was 8.8 percent, which may encourage speculative construction. Pressure on class A occupiers of warehouse/distribution space mounts due to lack of available class A space in excess of 125,000 square feet.”

Jones Lang LaSalle

Southwest

Phoenix Market Report

Arizona State University’s W. P. Carey School of Business and the Center for Real Estate Theory and Practice introduced a new commercial real estate report in 3Q13 for the Phoenix market. Consisting of survey results and anonymous comments from active commercial real estate brokers, the report provides a “boots on the ground” look at where apartment, industrial, retail, and office vacancy rates and rents are headed in the Phoenix metro area, as well as survey results and comments on investment fundamentals such as interest rates, cap rates, and investor returns. The report is available at www.wpcarey.asu.edu/realtyreports. ASU is CCIM University Alliance member; graduates of its master’s of real estate development qualify for CCIM’s fast track program: www.ccim.com/membership/university-fast-track

Midwest


West


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