Institutional Real Estate Americas

December 1, 2016: Vol. 28, Number 11

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From the Current Issue


The five qualities of a well-tempered city: Lessons from J.S. Bach

The well-tempered city aspires to the greatness of Bach, infused with systems that bend the arc of their development toward equality, resilience, adaptability, well-being and the ever-unfolding harmony between civilization and nature. These goals will never be fully achieved, but our cities will be richer and happier if we aspire to them, and if we infuse our every plan and constructive step with this intention.


Tech revolution: Cities reimagine industrial corridors as technology hubs

Cities large and small are embarking on economic development and urban planning initiatives related to infrastructure, employment-center locations, housing choices and amenities that specifically target recruiting, expanding and sustaining the tech workforce. Similarly, private-sector tech powerhouses are taking it upon themselves to tackle large-scale city-building initiatives through “entrepreneurial planning,” addressing broad community needs related to transportation, workforce housing and public spaces.


Driving value: Responsible and resilient property investing in the new millennium

The term “responsible” simply addresses our ability to respond. As investors, we can only react appropriately if we understand the full nature of risk and opportunity. In our experience, a holistic lens provides an insightful risk-management tool and drives superior value. Our objective, like that of most investors, is to create competitive and durable market-rate returns.


Moderation: Institutional real estate appreciation weakens, income holds steady

Representing $516.4 billion in market value, the quarterly total return of the NCREIF Property Index (NPI) continued to slow on weaker appreciation. The total return was 1.77 percent in third quarter 2016, down from 2.03 percent the previous quarter and 3.09 percent in third quarter 2015. This marked the first sub-2 percent total return since the commercial real estate recovery began in 2010.


Global investors still failing to hit allocation targets

The fourth annual Institutional Real Estate Allocations Monitor, from Hodes Weill & Associates and Cornell University’s Baker Program in Real Estate, shows institutional investors around the world are continuing to raise their target allocations to real estate and are on track to break the 10 percent barrier next year, but at the same time they are still significantly underinvested against their targets.


REITs fall sharply in October

U.S. equity REITs dropped 5.11 percent in October, according to the FTSE NAREIT All Equity REITs Index, as nearly every property sector declined. Year-to-date, REITs are still in positive territory with a total return of 6.57 percent.


CPPIB enters Seattle office market

The C$279 billion ($212 billion) Canada Pension Plan Investment Board has made its first office investment in Seattle. CPPIB and Hudson Pacific Properties have acquired a 285,680-square-foot, class A office tower in Seattle, known as Hill7, for $180 million.


U.S. CMBS delinquencies increase in October

The U.S. CMBS delinquency rate inched up in October, according to Trepp. The delinquency rate for U.S. commercial real estate loans in CMBS is now 4.98 percent, an increase of 20 basis points from September.


40 new funds launch during Q3

A total of 40 new investment funds were launched during third quarter 2016, bringing the 2016 year-to-date total to 128 new funds. As a group, the third-quarter funds are seeking to raise approximately $17.7 billion. This marks the fourth consecutive quarter with 40 or more funds being launched.

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