Tuesday, December 3, 2024

What's in store for CRE investment in 2025

By Joshua Mann – Editor, The National Observer, The Business Journals

Welcome to The National Observer, a roundup of top business news and actionable insights from across The Business Journals' network of publications. Today we're looking at what Walmart's CEO had to say about expansion plans, a $1.4 billion deal between two lenders and a multibillion-dollar federal loan to support a new manufacturing plant in Georgia. First, however, we'll dig into the cautious optimism being felt in the commercial real estate sector.

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CRE investors express cautious optimism

As 2025 fast approaches, executives are zeroing in on possible targets for their respective businesses in the coming year. For commercial real estate investors, there’s an expectation new opportunities might come available despite a slowdown in transaction activity year-to-date this year.

Ashley Fahey, editor of The National Observer: Real Estate Edition, reports the national commercial real estate market saw $40.1 billion in transactions in the third quarter, down from $43 billion in Q2 and $44.4 billion in Q3 2023, according to Altus Group research. While transaction activity slowed, the rate of the slowdown has moderated, especially on a yearly basis. Additionally, 10 of the 15 property types tracked saw a quarterly uptick in Q3 in price per square foot, including mixed-use, manufacturing, automotive and office properties.

QUOTABLE: "Transaction activity effectively begets transaction activity," said Cole Perry, associate director of research at Altus Group. "What I’m seeing is really more of the same: There is still slow transaction activity, it's declining year over year, price discovery remains pretty challenged — but I think it’s picking up a bit."

Perry said the market is in a new normal of transaction activity, with buyers and sellers learning how to deal with a lack of comparable sales. Industry players also are trying to anticipate what President-elect Donald Trump's policies and a Republican-controlled Congress could mean for the economy. While most are optimistic the incoming White House administration will mean deregulation or tax cuts, there's also concern policies around immigration and tariffs that were signature aspects of Trump's campaign will result in more inflation and economic uncertainty.

Walmart CEO on expansion plans, new-look Black Friday

Black Friday will be a lot different for Walmart Inc. this year than in years past. The retail giant’s stores will be different, too.

Chandler France of the Houston Business Journal reports that Walmart made a significant financial investment to renovate 650 locations this year and build or convert an additional 150 stores over the next five years. That follows the company in October 2023 reopening 117 remodeled stores across 30 states — an investment of more than half-a-billion dollars.

But as Walmart U.S. President and CEO John Furner told France during a site visit Tuesday, customers who visit one of those remodeled stories on Black Friday won’t be the only ones seeing a new-look Walmart. The company also has worked to enhance its online-shopping service — with the growth of e-commerce having “bifurcated” the traditional Black Friday experience, Furner said.

QUOTABLE “Competition makes you better,” Furner said. “A phrase I think about a lot is, ‘Loyalty in retail is the absence of something better.’ If we’re not the brand that’s providing the best choice for our customer, then someone else will happily come serve them for you.”

Full story: https://tinyurl.com/2s3sesms

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