Capstak's Weekly Wrap Up | May 19

by Capstak

 

1) Curbed | Marriott hotels turn to prefab for more efficient construction  

During the great recession, contractors and subcontractors left the industry and they still haven’t come back. Marriott, struggling with this shortage of labor and quality craftsmen is taking a new approach to building hotels – prefabricated. Marriott recently opened their first prefab hotel, Fairfield Inn and Suites, and is already working on the second in Oklahoma City. The economics behind their hotels appears to be working as the, “Company already anticipates signing up for another 50 factory-build hotels by the end of the year”

 

 

2) Forbes | The Seat Belt Is Tightening For Auto And Commercial Real Estate Lending  

This week, Ford announced they will be cutting about 1,400 jobs, In the wake of sluggish auto sales. These sales trends have a strong coloration to tightening lending standards, “A May report from the Federal Reserve Bank of New York showing that drivers with low credit scores are having a harder time getting auto loans.” This same lending trend is being seen in the commercial real estate industry. But, unlike the auto industry, the gap in traditional lending options has been filled by private debt funds. An analysis done by CrediFi, “Shows a significant drop in loan-to-value ratio in the first quarter of 2017, indicating that CMBS lenders, too, are tightening credit as their appetite for risk is shrinking.”

 

3) Bisnow | How Value-Add Has Changed Since The Great Recession

Right after the recession, value add properties were generally experiencing very low occupancy. Today, occupancy rates can be as high as 90 percent, pushing investors to look for different opportunities to bring value to a property. “We define value-add not only as interior and exterior renovations but also as potential improvements to management, inefficiencies and capital structure issues,” Milestone co-managing partner Robert Landin said. Along with rising occupancy, competition for value add properties has grown, especially in markets with strong job and population growth. This will continue to push value add investors to find new ways to find margins.

 

4) Wired | ONE MORE THING INSIDE APPLE’S INSANELY GREAT (OR JUST INSANE) NEW MOTHERSHIP

Wired took a deep look into Steve Jobs’ final project, Apple’s Mothership. When presenting the idea to the Cupertino city council, Jobs said, “I think we do have a shot of building the best office building in the world.” When completed, the border between nature and building will be blurred and the campus will hold around 12,000 employees. Apple hasn’t overlooked a single design element, from creating custom (sometimes four story) glass panels, based on their experience in building retail spaces, “Custom-built door handles, and a 100,000-square-foot fitness and wellness center complete with a two-story yoga room covered in stone, from just the right quarry in Kansas, that’s been carefully distressed, like a pair of jeans, to make it look like the stone at Jobs’ favorite hotel in Yosemite.” Apple is known for doing things different, and this building is definitely, just that.

 

5) TechCrunch | Uber Freight launches to connect truck drivers with available shipments

Uber has impacted commercial real estate in many ways, from proving the use case for the shared economy, to redefining how cities should be planned in anticipations of autonomous fleets of cars. Thursday, they announced “Uber Freight” which will no doubt have no doubt have impacts on industrial and retail properties. The new service pairs up trucking companies and independent operators, with loads that need to be hauled. A process that used to take multiple hours, phone calls and major logistics, is now boiled down to a quick browse for nearby available loads, and a tap to book.

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