The U.S. commercial real estate market in June hit its lowest annual price appreciation since May 2001, according to the Standard & Poor’s/GRA Commercial Real Estate Indices. The national composite is comprised of 10 underlying indexes, which cover both geographic, and real estate sectors, and tracks price appreciation month-by-month, and year-over-year.

At the end of June, the composite index had an annual price appreciation of 1.5%. This is a far cry from the cycle’s peak of 14.7% in August 2006, and the lowest growth rate since the 1.7% rate in May 2001. In May 2008, the index had been up 3.6%. The composite index was flat for the month of June.

In terms of geographic performance, the Pacific West was the only commercial territory declining in June, but is still up 3.3% annually. The composite regional performance was the worst since June 1995, on an annual basis, down 0.7% since June 2007. Not only was it the worst performance for the country’s commercial market since June 1995, but in fact, it was the first decline since June 1995, when the index was down 1.4%.

Among sectors, warehouses had the biggest monthly drop, declining 1.4%. Apartments also declined by 1% in June, but remain the largest sector gainer in the past one year amid the home ownership market fiasco, with an annual price appreciation of 3.6%. However, the apartment sector is down from annual appreciation of 7.7% three months previous.

Retail also showed positive growth, but was most notable for being way off its peak. The sector was up 0.6% in the annual period ending June, but that is versus a high of 15.1% one year ago, in the annual period ending June 2007, and is also one of the lowest growth rates since 2001.

Office was the only sector that declined in the most recent annual period, with 0.2% negative growth in the year since June 2007, but still, it actually has had the biggest gains among sectors in the past three months.

While only one region and two of four sectors saw price declines in June, the overall trend in the S&P/GRA indexes is downward movement on an annual basis, according to S&P.

Friday, September 19, 2008

From the Tampa Bay Business Journal – by Steven Ekovich

The current housing downturn and capital markets crisis have caused investors to worry about the commercial real estate market and remain on the sidelines. Despite these concerns, which have been compounded by negative media reports, fundamentals for most property types are still relatively healthy, except in some sectors of Florida’s property markets.

The fallout from the housing market is placing a strain on fundamentals in the Tampa commercial property market, driven primarily by ongoing job losses and loss of consumer confidence. But long-term fundamentals are expected to remain healthy.

In fact, there are signs in certain sectors recovery is already under way. In addition, right now there are excellent opportunities for buyers because assets are being offered at a discount to the prices of a few years ago.

Putting it all in context

The most pervasive theme of U.S. economic performance in the past 20 years can be summed up in a single word: resilience.

Steven Ekovich is the regional manager of the Tampa office of Marcus & Millichap Real Estate Investment Services. He can be reached at sekovich@marcusmillichap.com or 813.387.4700.

In a move that will certainly solidify Publix as the dominating force in Florida’s supermarket industry, Publix acquires 2.8M SF of store space

Lakeland, FL-based Publix, Florida’s largest supermarket chain, closed on the purchase of 49 Florida Albertson’s grocery stores. First announced in early June without a price tag, Publix disclosed in a Jun. 28 SEC filing that the portfolio carried an approximate sale price of $500 million.

The seller was private equity firm, Cerberus Capital Management, which operated the stores under the Florida Division of Albertsons LLC. According to CoStar COMPS, the 49 stores total approximately 2.86 million square feet.

Through the closing of this transaction, Publix acquired 53% of Albertson’s full-format Florida stores, further solidifying the grocer’s existing dominance throughout the state.

Publix said all the Albertson’s stores will be closed for a remodeling period, ranging from one to eighteen months, at which point they will reopen with the Publix brand.

Fifteen of the stores are located in North Florida, 30 in Central Florida and four in South Florida. At least four of the stores are located in Escambia County, a new market for Publix.

The locations of the 49 stores acquired are as follows. For more information on this transaction, see CoStar COMPS ID# 1586304.

• 2770 West Bay Drive, Belleair Bluffs
• 26841 S. Tamiami Trail, Bonita Springs
• 4651 Cortez Road, Bradenton
• 127 Cape Coral Parkway, Cape Coral
• 1735 N.E. Pine Island Road, Cape Coral
• 26583 U.S. Highway 19 North, Clearwater
• 1921 N. Belcher Road, Clearwater
• 1295 S. Missouri Avenue, Clearwater
• 10018 Griffin Road, Cooper City
• 2201 University Drive, Coral Springs
• 2100 Saxon Blvd., Deltona
• 16970 San Carlos Blvd., Ft. Myers
• 13401 Summerlin Road, Ft. Myers
• 610 N. Eglin Parkway, Ft. Walton Beach
• 3930 S.W. Archer Road, Gainesville
• 870 Village Oak Lane, Heathrow
• 12101 Little Road, Hudson
• 17400 Alt. A1A, Jupiter
• 1566 Bella Cruz Drive, Lady Lake
• 3825 East Bay Drive, Largo
• 13031 Walsingham Road, Largo
• 2381 State Road 434, Longwood
• 8833 North Tamiami Trail, Naples
• 3350 Tamiami Trail, East, Naples
• 7524 Dr. Phillips Blvd., Orlando
• 440 North Orlando Avenue, Orlando
• 10250 Curry Ford Road, Orlando
• 4950 Belle Terre Parkway, Palm Coast
• 35439 U.S. Highway 19 N., Palm Harbor
• 500 E. Lake Road, Palm Harbor
• 1101 8th Avenue West, Palmetto
• 9005 U.S. Highway 301 North, Parrish
• 5055 North 9th Avenue, Pensacola
• 2180 W. 9 Mile Road, Pensacola
• 9251 University Parkway, Pensacola
• 5998 Mobile Highway, Pensacola
• 4701 Park Blvd., Pinellas Park
• 1181 South University Drive, Plantation
• 4840 S. Tamiami Trail, Sarasota
• 3610 U.S. 27, North, Sebring
• 7880 113th Street, Seminole
• 1075 S. Pasadena Avenue, South Pasadena
• 3700 Fourth Street North, St. Petersburg
• 3030 54th Avenue South, St. Petersburg
• 3900 66th Street North, St. Petersburg
• 1925 North Monroe Street, Tallahassee
• 3521 Thomasville Road, Tallahassee
• 8701 West Hillsborough Avenue, Tampa
• 3838 Britton Plaza, Tampa

This article appears in CoStar’s Retail News Roundup: Sept. 21 to 27, 2008, a weekly column covering retail store expansions, closings, bankruptcies, acquisitions/mergers/sales, new retail developments, personnel changes, sustainability, and more.