Weekly Retail Real Estate News
Fed's Anticipated .25% Rate Hike Ushers in New Opportunities
On May 3, 2023, the Federal Reserve raised its benchmark interest rate by a much-anticipated 0.25%, presenting a plethora of new opportunities and challenges for the retail real estate industry. In this blog article, we'll examine how this rate hike effects cap rates and property values while also exploring potential future situations. We'll explore the prospective effects on retail real estate values and cap rates for the remainder of 2023 and into 2024, taking into account the impact of inflation and unemployment patterns, regardless of whether the Fed decides to pause or continue raising rates.
Olive Garden Parent Darden to Acquire Ruth’s Chris in $715M Deal
Olive Garden parent Darden Restaurants Inc. has entered into an agreement to acquire the 154-unit Ruth's Hospitality Group Inc. in a deal valued at about $715 million, the companies said Wednesday. Orlando, Fla.-based Darden, which also owns the LongHorn Steakhouse and Cheddar’s Scratch Kitchen brands among others, said it will commence a tender offer of $21.50 a share for Ruth’s shares in an all-cash transaction. Fine-dining steakhouse Ruth’s Chris is based in Winter Park, Fla.
4 Sandwich Chains Attempting To Make a Comeback
Many people lean on sandwiches as a healthier option in the world of fast food, and others enjoy the convenience of a good meal on the go when they're tight on time and money. But while some of the big sandwich chains have been able to weather inflation and lingering COVID-related setbacks, like Jersey Mike's, others, like Subway and Potbelly, have faced store closures and loss of revenue. A few other famous brands are still attempting to make recover and resurge from massive drops in foot traffic, economic pressures, and customers' food quality preferences.
Inglewood Transit Connector Secures Additional $100M Towards Construction Costs
In a show of unanimous support for the Inglewood Transit Connector (ITC) project, the South Bay Cities Council of Governments (SBCCOG) voted yesterday to re-prioritize over $100 million originally allocated to fund a proposed Centinela grade separation project, to instead serve as “backstop” or reserve funding, for the ITC.
Hinano Cafe Celebrates 60 Years in Venice Beach
In the ever changing landscape of Los Angeles, locals in Venice Beach have found a second home at Hinano Cafe, a local bar celebrating 60 years of being, what owner Mark Van Gessel calls “the Cheers of Venice.” “At Hinano somehow all the different issues seem to disappear,” Van Gessel said. “Young or old, straight, gay, [or] other preference, all ethnicities; everyone gets along. It's a really great feeling to see all the different barriers disappear and people just get along.”
Duck Donuts Races Ahead, Ready For Its Next Act
Betsy Hamm heard through a friend Duck Donuts was moving its headquarters to Mechanicsburg, Pennsylvania, and searching for a marketing leader. What she wasn’t familiar with, though, was the brand itself. The population last year of its origin town—Duck, North Carolina—was 782 full-time residents. The Outer Banks vacation spot, which sees that number climb over 20,000 during peak season, is the 11,252th largest city in America. But Duck Donuts knows how to leave an impression. Hamm, a Pennsylvania native with 15 years at Hershey Entertainment & Resorts on her resume, texted a couple of confidants who had visited the concept’s day one store on the Sound side of the sandbar island.
Most Popular Grocery Chain in US States
With a rising number of grocers sprouting up, chains have been devising unique tactics to stay ahead. A recent report from Placer.ai, a location analytics and foot traffic data company, identified the most-favored grocery stores in states across the country. Kroger, one of the nation’s retail powerhouses, was the most popular grocery store in six states across the Midwest and South, including Ohio where local shoppers visited the chain 42% of the time in March, the most recent data available, while customers in Indiana were also found to prefer Kroger over other grocers, with visit shares of 34%. Mississippi shoppers visited 43% of the time, and the rate in Tennessee was 35%. In Kentucky and West Virginia, Kroger was also crowned the top grocery chain, with visit shares of 59% and 51%.
Ikea's Plans To Open In Ontario Run Into Zoning Snag
Plans that have been in the works since 2019 to bring an Ikea to Ontario, California, have stalled. The home furnishings giant had originally planned a retail location but decided to instead develop a distribution center after the pandemic began. But the city of Ontario shut that idea down, the Inland Valley Daily Bulletin reported this week.
Cannabis Industry Prefers Property Leasing Over Purchasing, Survey Says
The legalized cannabis industry appears to be moving more rapidly toward leasing property as opposed to buying it as new states open up for sales, creating more competition. A decline in cannabis prices that began last summer caused the industry to rethink its property needs. The National Association of Realtors has observed the direct effects on multiple facets of real estate, according to the trade group, which surveyed its members in March and released a report last week.
This Analyst Believes Banks Will Extend CRE Loans As Maturities Come Due
No one is quite sure what will happen when the wave of CRE loan maturities start to come due this year and into the next few. Aaron Jodka, Colliers’ research director of U.S. Capital Markets, has his theories though. He believes that banks and other lenders may be willing to renew or extend loans for the coming wave of maturities coming due as long as they meet coverage ratios. He also believes, according to a post he wrote, that borrowers who had interest rate swaps should be able to work with lenders on rate buydowns.
National Landing's Retailers Are Counting On Strong Foot Traffic. Can Amazon Deliver?
As Amazon prepares to unveil the first new buildings of its HQ2 campus this summer — a pair of towers totaling 2.1M SF of office space — the tech giant and its development partner are adding a huge roster of retailers and restaurants to the area. The key question for the neighborhood now becomes: Will there be a big enough boost in foot traffic to support those businesses?
Mall Owners Face Loss of Bed Bath & Beyond, Franklin BSP Recoups Hotel Loan, Cleveland Hotel Refinances After Canceled Sale
Mall Owners Face Loss of Bed Bath & Beyond: Landlords with commercial mortage-backed securities loans on more than 120 U.S. shopping malls have exposure to Bed Bath & Beyond, which filed for bankruptcy protection as its looks for buyers, according to bond-rating firm DBRS Morningstar. Those borrowers are holding loans on properties with balances of more than $5.33 billion and many are now facing the loss of one of their largest tenants. Collectively, the malls are appraised at nearly $10 billion.
