Western Real Estate Business

MAR 2018

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

Issue link: https://westernrealestatebusiness.epubxp.com/i/948858

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page 23 Maximize Exposure @ ICSC RECON LAS VEGAS DON'T MISS THIS OPPORTUNITY TO: TARGET more retailers, developers, owners and brokers . REACH important decision-makers not attending ICSC RECON. EXPOSE your company's projects and services to the national and regional market. Bonus Distribution of our issue at the ICSC RECON Show. RESERVE YOUR AD SPACE TODAY FOR MORE INFORMATION, CONTACT Scott France, 404.832.8262 scott@francemediainc.com May 20-23, 2018 • Las Vegas ADVERTISE IN THE MAY ISSUES OF T he travel and tourism industry is one of the fastest-growing sec- tors on the globe, with Deloitte noting that bookings totaled almost $1.6 trillion in 2017. Factors contrib- uting to this stable growth include healthy consumer spending, strong corporate travel demand and shifting consumer tastes from products to ex- periences. It is those experiences that many hotel investors out West are hoping to capitalize on. No longer are hotels simply a place to rest our weary heads after a long day of work or play. They now re- quire first-rate amenities, convenient locations and enjoyable social spots because these have become the re- quirements of today's traveler. "Today — right this very minute -— people are traveling more than ever before," says Kimia Allahverdi, direc- tor of Customer Experience Exchange for Travel & Hospitality. "Millennial students [are traveling], families are on long-awaited holidays, senior citi- zens are on their around-the-world H eading into 2018, the commer- cial real estate lending market looks a lot like a NASCAR race: Drivers can only get so much juice out of their engines before restrictor plates kick in to moderate speed. By all accounts, debt capital inun- dates the market, but most lenders are controlling originations by cap- ping loan-to-value ratios at 75 percent and ensuring that cash flows can hold up under stress. That's a far cry from the last cycle, when commercial mort- gage-backed securities (CMBS) lend- ers shoveled out highly leveraged and lightly underwritten loans. The disciplined lending combined with other factors — low interest rates, signs that annual GDP growth may surpass 3 percent, and an occa- sionally erratic but business-friendly administration that is slashing taxes and regulations — is fostering expec- tations that 2018 will be another busy year. "From the most left wing to the most right wing, every developer and owner I talk to is very bullish," de- clares Tucker Knight, a senior manag- ing director in the Houston office of Berkadia. "One of my clients from the West Coast — he's not a giant [Don- ald] Trump supporter, I can tell you — is super pumped about this tax re- form." Provisions in the recently enacted Tax Cuts and Jobs Act include a cor- porate tax rate cut of 14 percentage points to 21 percent, reductions in individual tax rates, and favorable treatment of business income earned through a pass-through entity, a structure used extensively by real es- tate investors. The Andaz Palm Springs will be designed as a collection of small buildings and guestroom bungalows surrounding two outdoor pools, garden and lounge areas and winding walking paths. HOTEL INVESTORS FOCUS ON BOUTIQUE, LUXURY IN THE WEST While corporate hotels and sprawling family resorts will always have their place within the hospitality industry, much of the activity taking place out West involves boutique hotels and luxury properties that fulfill a certain niche. By Nellie Day see HOTEL, page 45 see LENDING, page 42 In December, NorthMarq Capital arranged a $93 million Fannie Mae green loan to refinance the 533-unit Columbus Plaza apartments in Chicago and to upgrade its energy and water systems. The seven-year, interest-only financing features a mid-3 percent floating interest rate. THREE REASONS FOR MORTGAGE BANKERS' BRIGHT OUTLOOK Favorable market conditions, a sweeping tax reform package and disciplined lending practices combine to buoy intermediaries' confidence. By Joe Gose Retail Trends to Keep on Your Radar in 2018. page 36 Los Angeles Market Highlight page 20 page 33 CMBS Delinquency Rate to Continue Its Slide in 2018 Orange County Market Highlight INSIDE THIS ISSUE www.REBusinessOnline.com February 2018 • Volume 15, Issue 6 Number 116 ® Sur vival of the Fittest Fitness tenants are proving themselves winners to shopping center owners. March 2017 BONUS DISTRIBUTION Plus: Designing For Entertainment The Gyro Shack Expands Capital Markets Review JANUARY 2018 LEADING THE WAY THROUGH THE 21ST CENTURY NET LEASE PROPERTIES MAINTAIN PACE

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