Bookmarks: 5 Interesting Articles That May Help You This Week

Each week, I select a few articles that rise above the fray and hopefully help you on your journey in the CRE world. They pull from one of four "corners:" corporate real estate, technology, management science and anything positive. I welcome your comments on these articles.

1. The 10 Key Questions For Real Estate To Grapple With In 2020

Could cap rates go below 2% for the best assets in big cities? Could some retail assets start to outperform their stellar industrial counterparts? Will climate change continue to rise in importance for investors? Each December the strategy and research team at UBS Asset Management outlines what it thinks will be the key questions the global real estate industry will need to address in the coming year.

At a point of big change for the sector, the future of real estate, how to allocate capital in an expensive market, what to do with a problem like retail and addressing the climate crisis feature prominently.

Here are the issues to get your head around next year if you want to succeed in real estate.

2. New Uses for Old Malls

Many malls across the country are struggling, but there are possible fixes in some situations. A solution used to revitalize the West Oaks Mall in Orlando could be a model for other shopping centers.

In Orlando, the Sunpass Customer Service Center, which is operated by Xerox, leased 75,000 square feet space in a former Sears. A Bed, Bath and Beyond call center occupies another 40,000 square feet, which used to be leased by a Belk.

David Chapin, EVP at JLL, thinks more office tenants will look towards malls as a high-density office space option for a low cost. To him, the mall is a perfect home for call centers and back office functions, especially with recent trends in open office floor plans and cafe style conference rooms.

As cities are growing and the labor market is changing, so is the office demand.

3. Today's CRE Tenants Want Lots Of Parking, But The Future Belongs To The Carless

As cities and commercial developers advocate nationally for reductions in urban parking requirements to prep for a less car-centric future, financiers and tenants continue to desire an abundance of parking spaces even if they come at a steep cost.

Parking is expensive to build, and increasingly developers don’t consider it a worthwhile investment.

“Developers would just as soon not pay for the storage of vehicles to the tune of $30K a space or somewhere around there if they don’t have to,” said Glenn Gadbois, executive director of LegacyConnect, a transportation-focused public-private nonprofit.

4. North American Trade Pact Could Cushion U.S. Economy

GUILLERMO ARIAS/AGENCE FRANCE-PRESSE/GETTY IMAGES

The new trade agreement with Mexico and Canada won’t bring an economic boom, but it could cushion the U.S. in the face of slowing global growth as it boosts some industries and removes a big source of business uncertainty.

The deal, reached Tuesday, also will keep U.S. trade on track with its two largest partners. U.S. trade with Mexico and Canada topped $1 trillion through October of this year, more than double the $470 billion of trade with China.

The benefits “are not so much in what USMCA brings, but rather what it prevents,” said Gregory Daco, an economist at Oxford Economics. He estimated that a U.S. withdrawal from the existing trade pact, the North American Free Trade Agreement, or Nafta, without a replacement would have dented U.S. gross domestic product by 0.5% in the first year.

5. Stop Believing in Free Shipping

Online shopping, when it works best, is sort of like a duck. The part above the water—the algorithmically selected products, the simple checkout process aided by personal information stored on phones, the package that appears on your porch two days later—glides placidly along, setting off only the gentlest of ripples in your attention. The apotheosis of e-commerce is when people spend money without feeling like anything has happened at all. Below the surface, the little webbed feet of retail paddle furiously.

Miceli alone takes a new bundle of packages to the post office nearly every day. This holiday season, the United States Postal Service will deliver a projected 800 million packages. Early in 2020, FedEx will start delivering on Sundays all year, a service previously reserved for the holidays.

In New York, where daily deliveries have tripled in less than a decade, trucks snarl streets and rack up nearly a half million parking tickets annually. In 2015, Amazon launched Amazon Flex, through which the company pays people to use their own cars to ferry boxes, assuming all responsibility for mileage and expenses. (Amazon did not respond to requests for comment.)

Your success blesses others. I wish you a great a hugely impactful week!

Ken Ashley