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/92705
M I DWE ST Offi ce Depot Shrinking Look for Offi ce Depot to drastically reduce its square footage in the next round of lease renewals. For example, in September, the Offi ce Depot in Frankfort, Ky., closed its 20,000-sf store, cut six employees, and reopened in a 6,000-sf former Blockbuster space, according to the State Journal in Frankfort. It's emblematic of the offi ce supply store's strategy to remain viable, which was suggested by its largest shareholder, Star- board Value LP. In a letter to the company's CEO and board of directors, Starboard determined that Offi ce Depot could cut store space by 75 percent, or about 7 million sf, according to CoStar, but still retain 90 percent of its sales. By downsizing the 250 to 375 stores up for lease renewal in the next three years from the current 24,000-sf format to 5,000 sf, Starboard said, the retailer could increase operating income by $50 million to $75 million. N O RTH E A ST New Offi ce Space Rising Together, New York and Washington, D.C., with 8.1 msf and 6.0 msf under construction respectively, account for 42 percent of new U.S. offi ce development underway, the majority of which is speculative. Secondary metros with >1 msf of offi ce space in development construction-to-inventory percentage Houston Philadelphia Cleveland San Antonio Silicon Valley, Calif. Source: Jones Lang LaSalle 0.0 M I DWE ST Suds Growth Home to Indiana University, Bloomington, Ind., is also home to Upland Brewery Co., which recently opened a new 37,000-sf brewing facility to increase production of its growing list of craſt beers. Upland, which distributes its beers in Indiana, Wisconsin, and Kentucky, is keeping its original facility as a brewpub and banquet space. Craſt brewing is becoming a strong local business in Indiana: T is year the state has about 30 breweries in operation; in 1990 there was one. Nationwide, the craſt brewing industry is also growing. More than 2,000 craſt breweries operate in the U.S., the largest number since the 1880s, according to the Brewers Association. In addition, more than 1,200 are in the planning stages, making microbreweries and brewpubs some of the fastest-growing local small businesses. 0.5 1.0 MSF 0.8% 3.7% 4.3% 1.2% 1.5 2.0 2.5 1.4% E A ST Crowdsource Leasing T e Parkville Shopping Center in Baltimore is soliciting tenant sug- gestions through Popularise, an online crowdsourcing platform. While the 161,734-sf grocery-anchored center is undergoing renova- tions, its owner, Regency Centers, has set up the site Popularise.com/ parkville and is encouraging local customers to log on with their ideas for improvements and tenant choices. As of Oct. 1, almost 3,000 people had visited the Parkville site, off ering more than 200 tenant suggestions and comments. Leasing specialists take note: Social media's wide appeal may help you build customer loyalty and target tenants who have a built-in local fan base. Canada's Commercial Market In 2011, Canada's commercial real estate sector contributed: $32.4 billion to Canada's GDP $21.6 billion in capital investment $14.9 billion in new buildings $3.5 billion in brokerage fees Source: Real Property Association of Canada/NAIOP Research Foundation Á Á Corbis Photography/Veer; Roman Shyshak/Veer Ä Ä Ä