Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/536709
8 July | August | 2015 Commercial Investment Real Estate T RE N D S M A RK E T Westend61/Getty Images The Digital Retail Divide "Digital interactions are expected to inf uence 64 cents of every dollar spent in retail stores by the end of 2015, or $2.2 trillion," according to the Deloitte report, "Navigating the New Digital Divide." T is f gure is considerably higher than the 14 cents of each dollar spent in brick-and-mortar stores in 2012, when Deloitte f rst measured the digital ef ect. T e report indicates that retailers are using the wrong metric to gauge digital interaction, focusing on e-commerce sales instead of digital-inf uenced sales. So far, the big winners are smaller companies that are able to inf uence sales online through social media and other digital formats before shoppers enter the store. "Retailers should focus on designing and building customer experiences that play to how their customers are shopping for their products — rather than direct consumers to the point of purchase," reports Deloitte. Airport Hotels Take Off Maybe you only think of airport hotels when you're stranded and looking for one. But, on average, in airline hotel submarkets, there are only 24 rooms per every 100,000 airline passengers, according to JLL. T is includes such busy tourist and business des- tination markets such as New York, Wash- ington, D.C., Orlando, Fla., and San Diego. With such lopsided supply and demand factors, airport hotels posted a 10 percent increase in revenue per available room in 2014, and topped all other hotel locations for increases in RevPAR, occupancy, and aver- age daily rates, according to STR. Onsite airport hotels have a 110 percent occupancy premiums and 130 percent ADR premiums, according to JLL research; however, half of the 35 busiest U.S. airports lack an onsite hotel. But investors understand the poten- tial, even if developers don't: Nearly $1 bil- lion in U.S. airport hotel assets traded as single-asset deals in 2014. CMBS Forecast 2007 high: $229 billion 20-year average: $71 billion 0 25 50 75 100 125 150 2014 2015F in billions 2016F 2017F Source: Urban Land Institute Net Lease Cap Rates SECTOR 1Q15 (%) 4Q14 (%) Retail 6.40 6.50 Offi ce 7.35 7.31 Industrial 7.70 8.03 Source: Boulder Group