US retail sales dipped 1.3% in May from the previous month, after two months of strong growth, but rose 28.1% over the same period last year, the Commerce Department reported Tuesday. As the number of vaccinated Americans grows, people are spending more on travel, entertainment and other services in categories that aren't reflected in the monthly report.
Kastle Systems reports that 31% of office workers have returned to their workspaces, and the numbers are lower for white collar workers in certain major cities. In contrast, people have returned more quickly to restaurants, sports arenas and airlines. "Habits that have been formed over the last year and a half are going to take a while to break," says Kastle Chair Mark Ein.
The recently sky-high lumber prices are now dropping, with futures for July delivery down 42% from early May, although prices are still well above typical levels for this time of year. Demand for wood products is expected to remain significant considering the amount of housing stock expected to enter the US economy, according to Weyerhaeuser CEO Devin Stockfish. PotlatchDeltic executives estimate that lumber will price between $700 to $800 through next year.
REITs continued to rally last week, with a 2.5% total return on the FTSE Nareit All Equity REITs Index. REITs have outperformed the broader markets over the past five weeks, with a total return of 8.3% since May 7, compared to 2.2% for the Russell 1000 and 1.9% for the S&P 500.
Washington Real Estate Investment Trust is planning to focus on the multifamily market and has agreed to sell almost all of its office portfolio to a Brookfield Asset Management fund in a $766 million deal. The 12-asset portfolio is located in the Washington, D.C., area, and the transaction is set to close in the third quarter.
Prologis has sold a 1.078 million-square-foot warehouse in Polk County, Fla., for $170 million. A corporate entity associated with Eaton Vance Real Estate Investment Group acquired the property, which is occupied by Amazon.
Mack-Cali Realty Corp. has sold a six-building office complex in Red Bank, N.J., to an affiliate of Crown Acquisitions for $84 million. "The sale of River Centre marks another important milestone and takes us one step closer to successfully completing the disposition of our suburban office portfolio," said Mack-Cali CEO Mahbod Nia.
Prologis has acquired a 68% stake in an industrial site in Queens in a deal worth $42.7 million, or around $109 per buildable square foot. The site currently has four single-story buildings with a combined 15,100 square feet of space.
A pandemic-era arrangement that has allowed some retailers to pay rent as a percentage of monthly sales could continue, with more shopping center owners signing leases that contain this provision. In many cases, these deals allow percentage rent for a limited period of time before reverting to a fixed-rent system.
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