Sovereign wealth fund China Investment Corp. has disclosed that it owns a 15.5% stake in a commercial real estate lender formed by TPG. CIC is increasing its exposure to private equity and real estate, as illustrated by last month's $13.8 billion deal to acquire Logicor.
The rise of e-commerce is fueling growth in REITs that own cell towers and data centers, as evidenced by Crown Castle International's proposed $7.1 billion acquisition of Lightower Fibre Networks and Digital Realty Trust's planned acquisition of DuPont Fabros Technology in a $7.6 billion transaction. Share prices are reflective of this trend, with total returns from data centers and infrastructure REITs both rising 22% in the first half of this year, according to NAREIT.
Real estate equities provide good diversification and improve risk-adjusted returns, as they are not correlated with general market trends.
With short-term interest rates rising, businesses are asking banks to raise the rates on their deposit accounts -- requests that banks are accommodating. The average interest the largest banks paid in the second quarter rose to 0.34% compared to 0.26% a year ago, according to Autonomous Research -- the highest level in four years and an increase that bankers say is due to business depositors.
Continued, moderate job growth has kept the real estate cycle in a growth phase, says Glenn Mueller, a professor at the Burns School of Real Estate and Construction Management at the University of Denver. "I don't really want a boom, and I don't think we're going to get one," he says.
The increase of office trophy product in the Washington, D.C., area is skewing the market's supply-demand equilibrium, according to JLL's Skyline report. The market has recorded 122,000 square feet of occupancy gains over the past year, an annual decline of 71%.
Some high-profile companies have rolled back remote-work arrangements as they seek greater collaboration among employees. The transition back to an office environment can be a difficult adjustment for workers who are used to telecommuting.
Dunhill Partners has purchased the 167,704-square-foot Center at Pearland Parkway I. The property is fully leased, with a T.J. Maxx and a Ross Dress for Less.
Cushman & Wakefield wrapped up a little more than $72 million worth of sales in California, including Argonaut Investments' purchase of Raley's Towne Centre, a 141,747-square-foot shopping center with a grocery store. River Park Crossings, a 121,107-square-foot shopping center, was purchased by Hastings Ranch Shopping Center, and the 42,073-square-foot Pinole Ridge Shopping Center was acquired by Victory Village 2004.
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