Net-Zero Hotel Project Challenges Hospitality Norms
Net-Zero Hotel Project Challenges Hospitality Norms
November 24, 2020 • According to some experts, the hospitality industry lags behind other real estate sectors when it comes to adopting energy efficiency measures. The conversion of a long vacant office building in New Haven, Connecticut into a net-zero boutique hotel could be a harbinger of greater sustainability for the hospitality industry. The energy efficient systems being incorporated into the building, coupled with its existing compact shape and envelope, have been designed to result in an 80% reduction in energy use. The remaining energy needs will be supplied by solar parking canopies and rooftop panels. Based on the developer’s current projections of $5 per square foot for the additional cost of these sustainability features and $1 per square foot in annual energy savings, the payback period for achieving net-zero status will be five years. Learn more
Brick-and-Mortar Retail Enjoys an Uptick in Demand
According to the International Council of Shopping Centers (ICSC), leasing activity at open air shopping centers throughout the U.S. was brisk in the third quarter of 2020. Brixmor Properties, a publicly owned shopping center operator with over 400 properties throughout the country, leased just under 700,000 square feet at rental rates that were 14% higher than the leases they replaced. Regency Centers, also publicly owned with a national portfolio of 419 properties, leased or renewed leases covering 1.4M square feet at rental rates representing a 1.2% increase over prior rates. The types of retailers entering into these leases ranged from grocery, beauty, discounters and quick-service restaurants, to sporting goods, warehouse clubs, pet stores and medical service providers. National tenants included Burlington, Chick-fil-A, Five Below, Target, CVS, Starbucks, Chipotle, and T.J.Maxx. Learn more
NYC Office Sector: Big Tech Gobbles Up Space Undeterred by COVID
In spite of the COVID-19 induced emptying out of office buildings throughout New York City, which shows no sign of abating anytime soon, Big Tech continues to expand its New York City office footprint. Amazon, Google, Facebook and Apple have added 1.6M square feet of office space to their NYC office portfolios and have hired 2,600 employees this year to fill these offices, even though Big Tech employees will likely be working from home for the foreseeable future. The 2020 additions to Big Tech’s NYC office portfolios include some of the city’s most iconic properties, including the Lord & Taylor building on 5th Ave., which Amazon’s purchased from WeWork in March and 730,000 square feet in the James A. Farley building (also known as the ‘old post office’) leased by Facebook. Google is on target to employ 14,000 people in the city as construction on its newest property, a 1.3M square foot leasehold at 555 Washington Street, moves forward. Learn more
Looking Ahead to 2021: ULI’s Economic Forecast
According to ULI’s Real Estate Economic Forecast published in October 2020, the outlook for 2021 is more favorable than was expected in the spring. Real estate transaction volumes are expected to rise from $300B in 2020 to $400B in 2021 and $500B in 2022. Total returns from unleveraged core real estate is predicted to rebound in 2021 to 3% and in 2022 to 5.6%. A more nuanced look at predicted occupancy rates and revenue fluctuations reflect wide variations across property types. Hospitality is predicted to suffer the most with average occupancy plummeting from 66.1% in 2019 to 49.1% in 2020. At the other end of the spectrum, industrial/warehouse occupancy is expected to be 92.3% in 2020. Revenue growth from 2020 to 2022 is expected to be highest for industrial properties at 2.1% per year, while hotels revenues are expected to decline 3.3% from 2020 to 2022. Learn more
Join Ellen Sinreich and ICSC for 2020 Wrap Up & Look Ahead
Please join Ellen Sinreich, founder of ICSC’s Legal Forum, and an esteemed panel of speakers for the Legal Forum’s upcoming Webinar: 2020 Wrap Up & Look Ahead, on December 16th at 2pm Eastern. Ellen will moderate a panel of landlord and tenant representatives who will discuss how the retail real estate industry fared in 2020 and what they expect in 2021. Learn more