Don't see images? Click Here SUBSCRIBE FOR FREE MANAGE EMAIL PREFERENCES
Bisnow - (Almost) Never Boring
August 21, 2020

How More Short-Term Leases Are Changing The Way Office Buildings Are Valued

Tenant demand in the office market has been increasingly favoring shorter-term lease deals, a trend that complicates how much buildings are worth. 

This shift has created more flexibility for tenants who don't want to be locked into a long-term lease, and it has helped landlords fill spaces in their buildings that may otherwise sit vacant.

Despite the move toward shorter-term leases, office buildings still achieve higher valuations when they have the stability of long-term leases, and landlords have had to work to make lenders and investors more comfortable with the flexible deals their tenants crave.

How The Shift To Short-Term Leases Is Changing The Way Office Buildings Are Valued

Lease terms can have a variety of effects on a building's valuation, but experts agreed that buildings with longer-term leases are consistently more valuable than ones with shorter deals. But as the market evolves, some see a growing acceptance of lease flexibility that could increase the perceived value of more flexible leases.Short-term leases…

Read the full story here.

  Share:  
 
Perforation

Top Stories on Bisnow.com

CBL Properties Ready To File For Bankruptcy CBL Properties Ready To File For Bankruptcy
Airbnb Files Confidential IPO Submission With SEC Airbnb Files Confidential IPO Submission With SEC
Multifamily Starts Soared In Q2 As Homebuilder Confidence Hit Record High Multifamily Starts Soared In Q2 As Homebuilder Confidence Hit Record High
Skittish Foreign Investors Spooked Despite Weaker Dollar  Skittish Foreign Investors Spooked Despite Weaker Dollar 
Perforation

MRP Signs Brewery At New Building Near Nationals Park

MRP Signs Brewery At New Building Near Nationals Park  

The District's craft beer scene continues to grow with a Northern Virginia brewery planning to open across the street from Nationals Park.  Solace Brewing Co. plans to open in The Maren, MRP Realty's new apartment building at 71 Potomac Ave. SE, >

Read Full Story

  Share:  
Perforation

HUD Official: White House May Bring Back Affordable Housing Funding Initiatives

The White House is considering restoring an Obama-era initiative aimed at promoting affordable housing production, a U.S. Department of Housing and Urban Development executive said on a Bisnow webinar this week. 

Read the full story here.

 
Perforation

In Case You Missed It...

Montgomery County, WMATA Working On Deal For Life Sciences Hub At White Flint Metro Montgomery County, WMATA Working On Deal For Life Sciences Hub At White Flint Metro
Boston Properties Puts Fairfax County Mixed-Use Property On The Market Boston Properties Puts Fairfax County Mixed-Use Property On The Market
Redevelopment Of 80-Acre Armed Forces Retirement Home Campus Takes Step Forward Redevelopment Of 80-Acre Armed Forces Retirement Home Campus Takes Step Forward
Texas A&M Signs Lease To Open D.C. Campus Texas A&M Signs Lease To Open D.C. Campus
Rosslyn Developer Scales Back Hotel Component In Response To Pandemic Rosslyn Developer Scales Back Hotel Component In Response To Pandemic
 
Perforation

Green Shoots Appearing In Medical Office After Months-Long Deep Freeze

Medical office tenants went into a deep freeze along with everybody else starting in March, hunkering down as the coronavirus pandemic made it impossible to see patients. Making decisions on whether to sign new leases and expand wasn’t practical.

But with many states lifting the restrictions on seeing patients, as well as some medical tenants gaining a better understanding of how the ongoing crisis will impact their business, leasing activity is finally starting to pick up again.

Read the full story here.

 
Perforation

Fighting Rising Floods Means Rising Costs For Developers

 

HOUSTON — When Camden Property Trust CEO Ric Campo began evaluating a piece of land in Houston’s Texas Medical Center to build a new mid-rise multifamily property, he had high hopes. The site, occupied by a single restaurant, had never flooded.

It was 2018, and Harris County had just approved the first significant overhaul of county flood elevation requirements in nearly two decades.

After just one month of engineering analysis, it became evident that Camden’s plans for a five-story apartment complex on top of a two-story parking garage simply couldn’t work. The new rules meant the building would require an extra level, pushing the development into the high-rise category. The economics of the project no longer made sense.

“If we had the old rules in place, then we would have developed it,” Campo told Bisnow. “We would have bought the land and developed it, and built 300 apartment units there — probably a $100M transaction, plus or minus. And now, today, it's a closed restaurant.”

In the three years since Hurricane Harvey made landfall, Houston’s flood regulations have become tougher at both the city and county levels. While developers acknowledge the importance of those regulations, they say the new rules have increased the difficulty of getting projects off the ground. With flood mitigation requirements adding as much as 12% to the upfront cost of a new development, some are choosing to simply walk away.

Read the full story here.

 
 
       
 
You are receiving this email because you are either a member of the Bisnow community, have attended a Bisnow event, because you have a legitimate interest in real estate news and events because of your profession, or because of your business associations, memberships or partnerships.
 
This email was sent to: newsletter.archives@bisnow.com
 
   
 
123 William St, Suite 1505, New York NY 10038
Newsletter Approval Code: 41349