With the US economy still expanding, REIT investors have no reason for concern as interest rates rise, according to REIT portfolio managers at Cohen & Steers. The firm's research shows that REITs have outperformed other equities when interest rate increases were due to economic expansion.
The retail sector's lackluster year in 2017 -- absorption was down about 30% from 2016 and 2015 -- is beginning to affect high-end malls, which in recent quarters have seen a moderate rise in vacancies and flat rental rate growth, according to CoStar Group. Also, the typically safe grocery-anchored space may come under risk from over-retailing and tenant competition.
Airbnb announced several measures to make its room-sharing service more competitive with hotels, including a new service called Airbnb Plus, in which higher-end homes are inspected to ensure they meet quality standards, and a new luxury brand called Beyond by Airbnb. Hotel listings on the site have increased significantly, and Airbnb also plans to offer a service called Boutique, which can be used to search for hotel rooms.
An outlet mall development near Tallahassee, Fla., could break ground as soon as spring 2019. Park Place Outlet Mall will include a restaurant, a hotel and a park, along with retailers.
Weingarten Realty has sold Tates Creek Centre and Millpond Center in Kentucky to Branch Properties for $59.7 million. Both retail assets are anchored by Kroger stores.
Westfield Annapolis, a retail shopping center in Maryland's capital, is being remodeled; the work will include adding a family lounge and updating the Bow Tie Cinema and the food court. Additionally, the public library is opening a location in the retail center.
Better Things LLC has purchased the 9,222-square-foot Devonshire Station retail center in Indianapolis. The property features a CVS Pharmacy, McDonald's, Peak Fitness and Dollar General.
Portfolio manager Laurel Durkay contends the time may be right to buy real estate investment trusts despite the severe headwinds besetting the sector amid concerns over interest-rate rises. "Historically what you've seen is that in rising interest rate environments, if you do see the accompanying accelerating growth, that's actually a point in time where REITs are going to outperform the broader equity index," Durkay says.
Host Hotels & Resorts placed three Hyatt hotels -- Andaz Maui at Wailea in Hawaii, the Grand Hyatt San Francisco and the Hyatt Regency Coconut Point in Bonita Springs, Fla. -- under contract to buy for $1 billion. The REIT sold the Key Bridge Marriott in the Washington, D.C., region for $190 million and has a contract to sell the W New York for $190 million.
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