Limon Net Lease Group

Archives for January 2024

New Supply Outlook and the Impact on CRE

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HOW MUCH OF AN IMPACT WILL NEW SUPPLY HAVE IN 2024?​

New Supply Pressure Decreasing For Most Asset Types​

  • Retail, Industrial and Office pipelines all show a reduction in new development when compared to 2023​
  • Apartment construction is slated to rise, but given the housing shortage nationally, expectations are for strong 2024 absorption​

Surging Construction Costs Making Development Less Feasible​

  • Construction materials and labor costs have all risen more than 20% since the end of 2019​
  • Construction financing costs have risen 300 to 500 basis points since 2019, reaching between 8% and 10% entering 2024​
  • Developers are facing an increase in overall costs between 25% and 50% since the onset of the pandemic​

Long-Term Pipeline Showing Effects of Higher Costs​

  • Looking forward to 2025 and beyond, the construction pipeline will thin sharply across asset types​

*Through 4Q; ​
Sources: Marcus & Millichap Research Services, Senior Loan Officer Opinion Survey​

​Watch the Video Below

 

What Retail Sales Trends Mean for CRE

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WHAT NEW RETAIL SALES DATA SIGNALS FOR CRE INVESTORS IN 2024​

U.S. Consumers Increase Real Retail Buying By 3% Annually​

  • December inflation-adjusted core retail sales climbed above $520B for the first time on record​
  • Positive movement in many of the retail subcategories is reversing yearlong downward spending trends​

Consumer Spending Drives Retail Space Demand​

  • Heightened spending supports retailers, with restaurants, bars, and personal health retailers recording the sharpest gains to close ‘23​
  • Strong spending has helped keep retail vacancy near record lows entering the new year​

Online Retail Continues To Grow Its Market Share​

  • Online spending also expanded over 6% annually, boosting industrial space demand entering 2024​
  • Since the pandemic, the non-store segment of retail has grown 61.7%, expanding E-commerce from 15% to 21% of core sales​

*Retail sales through December​
Core retail sales excludes auto and gasoline sales ​
Adjusted for inflation using Core PCE, November 2023 dollars​
Sources: Marcus & Millichap Research Services, U.S. Census Bureau​

​Watch the Video Below

 

Red Lobster – A Bridgeton Tradition

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Bridgeton has a rich history that dates back to the 18th century, when it was first settled by French and Spanish colonists. It was originally named Marais des Liards and later Village à Robert, after Robert Owen, who received a land grant from the Spanish government. In 1843, it was incorporated as Bridgeton, in honor of the many bridges that spanned the nearby Missouri River.

Over time Bridgeton’s prominence grew as St. Louis County continued to expand. It is a second-ring suburb of Greater St. Louis and serves as the primary transport hub within the region, as it’s right next door to St. Louis Lambert International Airport. It is also home to a vibrant retail corridor and an industrial base.

Because of this economic diversity, Bridgeton has a strong outlook, thanks to its strategic location and low taxes. It has a median income of $60,000 and a trade area of more than 1 million people. With its quick access to the airport, Bridgeton has a strong industrial job base, boasting nearby companies such as Boeing, GKN Aerospace, Hunter Engineering, Virbac, and others.

More importantly, Bridgeton’s location serves as a magnet for locals who enjoy easy access to shopping, the Sophia M. Sachs Butterfly House, Bridgeton Crossing Family Aquatic Park, and all the amenities along the Missouri River.

For years, as Bridgeton grew, Red Lobster grew right along with it. Red Lobster is a global leader in seafood dining, with more than 700 restaurants in over ten countries. The company, which is based in Orlando, Florida, was founded in 1968 by Bill Darden, a visionary entrepreneur who wanted to make quality seafood accessible and affordable for everyone. Today, Red Lobster is known for its fresh, delicious, and responsibly-sourced seafood, as well as its iconic Cheddar Bay Biscuits.

Valuing their impact on the community they serve, they donate unused, wholesome food to local food pantries and community organizations every week through their RL Shares program. They also support the Make-A-Wish Foundation to grant wishes to children with critical illnesses throughout the area. As a company that Forbes called one of the best large employers in America in 2023, their biggest contribution to Bridgeton is providing a variety of career opportunities that offer competitive pay, insurance, tuition reimbursement, and more.

Three Reasons CRE Activity Should Revive

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  • The real reason the 2024 economic outlook could bolster investor activity
  • The 2024 interest rate outlook and how it will shape investor demand
  • How much capital is awaiting placement in CRE?

Sources: Marcus & Millichap Research Services​

Watch the Video Below

 

Exploring Columbiaville: A Hidden Gem in Michigan

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Columbiaville is a charming town that has captivated both residents and visitors with its rich history, vibrant community, and attractions. Situated ten miles outside of Flint, Michigan this beautiful town offers a perfect blend of suburban tranquility and accessible amenities. Whether you are a history enthusiast, a nature lover, or a potential resident, Columbiaville has something to offer for everyone. 

Columbiaville was founded in 1837 and was named after Christopher Columbus. Its historical charm is evident in its well-preserved buildings and landmarks that provide a glimpse into the town’s heritage. Surrounded by picturesque landscapes, Columbiaville is home to several parks and outdoor recreational areas. The Holloway Reservoir, a popular spot for water activities, offers fishing, boating, and swimming opportunities. The town also hosts various events and festivals throughout the year, such as the Chili Cook Off, the Polar Plunge, and the Santa/Fire Truck Parade.

Columbiaville has seen steady growth in its real estate market, attracting potential residents seeking a peaceful suburban lifestyle. Several residential communities have emerged, offering modern housing options tailored to diverse budgets and preferences. These communities feature amenities such as parks, walking trails, and community centers. The town has undertaken revitalization projects to maintain its historical character while upgrading infrastructure and amenities. Efforts to preserve architectural integrity ensure that new developments seamlessly blend with the town’s existing charm.

The opening of a Dollar General store in Columbiaville in 2018 had a positive impact on the village in several ways, including providing more convenient and affordable shopping options for the residents, especially for consumables and household items, creating more jobs and tax revenues for the local economy, and attracting more visitors and customers from nearby areas, boosting the village’s visibility and reputation.

Dollar General has solidified its position as one of the most profitable stores in rural areas of the United States, with revenue reaching approximately $34.2 billion in 2021. Dollar General makes it easier to shop for everyday needs by offering the most popular brands at low everyday prices in convenient locations and online. The company is proud to be America’s neighborhood general store and strives to make shopping hassle-free and affordable with more than 19,000 convenient, easy-to-shop stores in 47 states.