Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/77480
THE BOTTOM LINE Triple-net-lease market grows costlier The national cap rate for triple-net-leased retail properties continues to shrink, thanks to lower volumes of new construction and to a surplus of investment, ac- cording to The Boulder Group. The cap rate on these eased to 7.5 percent in the second quarter, off 25 basis points from the first quarter. Newly constructed properties, especially those with long-term leases to national credit banks and restaurants, enjoy the most demand among investors. The cap rate for restaurants fell 25 basis points between the first and second quarters, to 7.25 percent. The cap rate for banks, meanwhile, fell 35 basis points to 5.5 percent. Capital raised by property sector, 2012 YTD (in $billions) U.S. REIT Common equity Self storage Specialty Industrial Residential Office Retail Health care Hotel Diversified 0 As of July 13, 2012 30% 10 15 20 25 -20 -15 -10 -5 0 5 Jun '11 Aug'11 Oct '11 Dec '11 * Total returns through 6/25/2012 Apr '12 Feb '12 Jun '12* SOURCE: SNL FINANCIAL SNL US REIT retail (21.1%) SNL US REIT equity (10.93%) Russell 3000 (4.06%) 1 2 Preferred equity $2.96 $1.65 $5.95 $4.03 $2.87 $0.3 $1.76 $5.86 $2.1 3 4 5 6 Retail REITs on year total return 7 SOURCE: SNL FINANCIAL Senior debt Global real estate getting more transparent Global real estate markets are becoming more transpar- ent now that repercussions of the financial crisis of 2008 are fading, according to Jones Lang LaSalle. A large majority of the 97 countries on the firm's real estate transparency index have made it easier over the past two years for investors to track real es- tate performance. Many of these are improving their fundamentals data and performance gauges and ex- hibiting better governance of real estate investment vehicles. The U.S. is the world's most transparent real estate mar- ket, according to the index, followed by the U.K. and Australia. The index spotlights continued transparency deficiencies in some African, Middle Eastern and Latin American markets. The lowest-scoring countries are Ven- ezuela, Mongolia, Tunisia, Ghana and Iraq, in that order. Overall, debt transparency has improved modestly since 2010. The availability of data on outstanding debt and capital flows increased in 11 markets, and regulatory oversight of commercial real estate lending has gotten better in 15 markets. Deal Barometer WHO IS PAYING HOW MUCH FOR WHAT $6 million Los Angeles–based O&S; Holdings sold a fully occupied, 15,250-square- foot, multitenant unachored strip at 39450 10th St. W., in Palmdale, Calif., to a Los Angeles family trust $6.1 million Kimco Realty sold Errol Plaza, a 71,500-square- foot, Winn-Dixie- anchored retail center in Apopka, Fla., to Toronto- based Slate U.S. Opportunity Realty Trust $36.9 million Phoenix-based Pederson/MNG Grayhawk Plaza Associates sold the 147,000-square- foot Grayhawk Plaza, in Scottsdale, Ariz., to Scottsdale Grayhawk Center LLC, of New Mexico $67.1 million Westfield Group sold the 152,191-square- foot Shore City, in Auckland, New Zealand, to Aviva Investors Asia Pacific Property Fund $119.8 million London-based Capital & Regional's Mall fund sold the Castle Mall Shopping Centre, in Norwich, England, to Infrared European Active Real Estate Fund $321 million Jacksonville, Fla.– based Regency Centers sold a 2.1 million-square-foot portfolio of 15 community centers to an affiliate of Blackstone Real Estate Partners VII DEAL OF THE MONTH $1 billion Wharf Holdings Ltd. signed a renewal lease with the gov- ernment for another 21 years of operation at Ocean Terminal, its 922,467 square- foot-shopping and office complex in Hong Kong's Tsim Sha Tsui tourist district 66 SCT / SEPTEMBER 2012