Each Wednesday, The Wrap presents a compilation of recent noteworthy commercial real estate stories from a variety of publications. Below are five stories that caught our eyes in recent days.
• “Health-Care Owners Shun Nursing Homes” by A.D. Pruitt of The Wall Street Journal.
Some of the largest owners of healthcare facilities are scaling back their investments in nursing homes because of their growing concerns that the homes will be less profitable in the face of steep Medicare and Medicaid cuts, Pruitt reports.
Ventas Inc. has said it will won’t make any major new acquisitions until the effects of the cuts become clear, while others, like Health Care REIT Inc., say they might exit the sector altogether, Pruitt reports.
A number of states are reducing Medicaid reimbursement payments to nursing homes, and the federal government cut Medicare rates by 2 percent on April 1 as part of the sequestration, Pruitt notes.
Other firms say they aren’t concerned about possible sequester-induced cuts and that the market risk is overstated, Pruitt reports.
• “Office Demand Still Catching Up With Job, Business Growth” by Randyl Drummer of CoStar.
Modest job growth has prevented a dramatic increase in demand for U.S. office space, and therefore rents have remained at relatively low levels, Drummer reports.
Average office employment is growing at a rate of just more than 2 percent, while demand for space is growing at just half that rate, according to CoStar Group’s First-Quarter 2013 Office Review and Outlook.
In the first quarter, the national office vacancy rate declined 10 basis points to 12.2 percent. The post-recession high was 13.5 percent, according to Drummer.
• “Samsung Opening 1,400 Mini-Shops inside Best Buy Stores across U.S.” by Salvador Rodriquez of The Los Angeles Times.
Samsung is planning to open hundreds of mini-shops across the country inside Best Buy big-box locations, Rodriquez reports.
The electronics giant already has opened a couple of the shops and hopes to have 900 of them up and running by the end of May and 500 more shortly after, according to Rodriquez.
Samsung considered opening its own retail locations, but found that partnering with Best Buy would allow it to open the stores more quickly, Ketrina Dunagan, Samsung’s vice president of retail and channel marketing, told Rodriquez.
• “Miami’s Condo Market Rebounds, Stoking a Building Boom” by Terry Pristin of The New York Times.
Because of the demand of Latin American investors, only about 600 of the 22,000 condos created in downtown Miami during the pre-recession era are still on the market, Pristin reports. Now, developers are building more units, he adds.
In February, home values rose by 10.4 percent in Miami versus a year ago, while national home prices jumped 9.3 percent, Pristin notes.
Miami officials are encouraging condo developers to provide easy access to public transportation, street-level retail and underground parking, Pristin reports.
• VIDEO: “Quick Study: REITs Beat Market in April” by Allen Kenney of REIT.com.
In this clip, NAREIT Editorial Director Allen Kenney and Senior Vice President of Research and Industry Information Brad Case discuss the REIT market’s performance in April.
The two discuss how the REIT market performed in relation to the rest of the stock market and which sectors stood out for their performances.