Year In Review: Biggest News Stories of 2017

Here are the stories that CoStar News readers considered to be the most interesting and newsworthy in 2017:

The Hottest Real Estate Markets of 2017

Now that we embark on 2018, its a good time to look back and review what happened in real estate for 2017. As a whole, real estate flourished in 2017, spurred by low mortgage interest rates, high demand and a relatively low supply of homes on the market. Although 2017 was a good year for just about everyone, what were the hottest real estate markets for 2017?

In dangling the prospects of investing billions of dollars in the community and adding tens of thousands of high-paying jobs, online retail giant Amazon kicked off a mad scramble among jurisdictions in September after the firm issued an RFP for a new co-headquarters. Debates over which locations best suited the online retailer’s mega-office requirement consumed the CRE industry and will likely continue to do so ahead of Amazon’s site selection, which is expected sometime this year.

More than a year in the works, Newmark Group, Inc. (Nasdaq: NMRK) completed its initial public offering of 20 million shares of common stock, the first IPO for a real estate services firm in many years. Howard Lutnick, chairman and chief executive of Newmark Knight Frank parent company BGC Partners, Inc., (Nasdaq: BGCP), made good on his plans to spin-off Newmark as a separate publicly traded company in the fourth quarter. The move added to market speculation that Cushman & Wakefield may follow with an IPO of its own in 2018.

Much of the nation was fixated in August on the impact of a pair of hurricanes that ravaged much of Florida and the Texas-Louisiana region. And while the extent of the devastation wasn’t as great as first feared, initial combined damage estimates foresaw $29 Billion in commercial property losses with $150 billion to $200 billion in economic impact attributed to the back-to-back natural disasters.

In a midyear multifamily update, we examined recent market analysis that found U.S. housing supply remains well below long-term market averages even as developers continue to pursue new downtown apt. projects and single-family homebuilding finally ramps up.

The news that Amazon was buying Whole Foods caught many retail observers by surprise and rattled already jittery shopping center owners. But the deal catapulting the world’s biggest e-tailer into the leading ranks of the U.S. grocery industry was quickly reappraised as proof of the ongoing integration of online and physical retail stores and that well-located retail property will have a place even as e-commerce continues its rapid growth.

Fast-developing driving technologies are expected to usher in a $7 Trillion ‘Passenger Economy’ by 2050 according to some futurists. The expected wide-ranging impact on real estate expected to affect everything from recapturing parking space, to amenities to zoning, and is already beginning to have an impact on the market.

In a surprising move, Paris-based Unibail Rodamco agreed to acquire shopping mall owner Westfield Corp. for almost $16 billion. The decision Unibail, which gives it entry into the U.S. market, followed news that General Growth Properties Inc. (GGP) had recently rejected a takeover bid from Brookfield Property Partners, which has a large minority stake in the company. Given Unibail’s deal, we may not have heard the end of a GGP-Brookfield tie-up.

CoStar News was one of the first to report on plans by national CRE services firm NKF to beef-up its valuation and appraisal business lines ahead of its expected IPO later in the year. NKF wasn’t alone in its quest to expand its valuation platform.

In a sign of the continued strong appeal of multifamily property for investors, apartment REIT Monogram Residential Trust, Inc. (NYSE: MORE) accepted a buyout offer from a newly formed perpetual life fund, Greystar Growth and Income Fund, led by Greystar Real Estate Partners in a transaction valued at $3 billion, including debt. In another sign of the sector attracting ‘big money,’ Starwood struck a deal to buy out Milestone Apartments REIT for $2.85 billion, adding 24,000 apt. units to Starwood Capital’s portfolio.

In August, CoStar News reported that the State Council of the People’s Republic of China officially announced measures to curb outbound investment – a move Chinese officials had been hinting at all year. The clampdown was expected to impact deal pricing for major assets in the largest gateway markets, which had become a favorite target for Chinese investors. However, market analysts see plenty of other investors–both foreign and domestic–available to fill the gap. The clampdown on Chinese overseas investment followed news earlier in the year that some members of Congress had become concerned over the national security risk associated with the growing Chinese ownership of U.S. assets.

Dollar stores remained a retail success story in 2017, continuing to defy online disruption by expanding into untapped, low-density areas to minimize the online threat and drive sales growth.

The blockbuster deal of CVS Health (NYSE: CVS) agreeing to acquire Aetna Inc. (NYSE: AET) for $77 billion has the potential not only to fundamentally alter the health plan market but also radically reshape the retail and health care real estate markets.

Once an overlooked niche, the student housing sector is attracting increased attention from major investors, who see the sector as offering less rental growth volatility and a recession-resistant hedge to conventional apartments.

In a midyear change from focusing on exposure to construction and development and multifamily lending, bank executives and analysts refocused on a new topic this past quarter: addressing perceptions of retail weakness in their real estate lending. The shift in focus followed a drop in CRE lending growth by banks in the first quarter to its slowest level in two years.

News on personnel moves and new hires is always a consistent top read by CoStar readers and 2017 was no exception. Among the numerous personnel news to attract readers was the late-November bombshell dropped by Cushman & Wakefield announcing the departure of Tod Lickerman, who was named CEO of the Americas in a major realignment of the brokerage’s senior leadership just over a year ago, and his replacement, Shawn Mobley, who most recently served as president of the company’s East Division.

CoStar News Expanding to Bring You More CRE Coverage in 2018

Look for more of the best CRE news from CoStar in 2018. We’re expanding our coverage in major markets, bringing in experienced business reporters to enhance our news across top markets and CRE sectors. The CoStar News team would like to thank all of our readers for reading this year, and look forward to bringing you even more important news and insights in the New Year.
Source: Year In Review: Biggest News Stories of 2017