Capital Rivers' Radio Spots.
"And now to keep you current on what’s happening in the commercial real estate world, here is Greg Aguirre with Capital Rivers Commercial. "
2022 Outlook
"At Capital Rivers Commercial we are maintaining a positive outlook for the commercial real estate sector in 2022. There will undoubtedly be some bumps along the way as we work through the continued supply chain challenges, COVID uncertainty, and inflation; however, there is still a lot of pent-up demand for space and from investors for quality industrial, retail, and multi-family product. We also expect to see some positive, but slower, growth in the office sector as employees start to come back to a hybrid work environment. The Fed announced it plans 3 rate hikes to keep longer-term inflation pressures in check. This will increase interest rates; however, debt is still relatively cheap, so we don’t see this as a major concern yet but rather something to monitor."
Retail Armageddon
"Retail Armageddon, Retail Apocalypse were the headlines in 2020; however, the opposite has proven to be true. Retailers with physical brick and mortar stores who embraced the omnichannel model have been more successful than ever. Target and Walmart are great examples of a retailers who jumped onboard early with omnichannel synergies. According to research company “Placer.ai” Target has seen a 10 to 16% increase in physical store visits throughout 2021 because of their efforts. Walmart announced it is expanding into the healthcare space by planning to install 4,000 primary care clinics in Walmart Supercenters by 2029 and they already currently operate 24 clinics in Arkansas, Georgia, Texas, and Illinois. The stores with clinics have already seen significantly higher customer visits resulting in overall higher store sales. "
https://www.mobihealthnews.com/news/how-retail-giant-walmart-plans-disrupt-healthcare-industry
https://retailwire.com/discussion/reality-hits-omnichannel-retail-with-a-hard-truth/
Amazon
"Under the cover of night Amazon has secretly been locking down new Amazon Fresh locations in Northern California…. as it continues its expansion into the omni-channel grocery market to gain more of Amazon Prime members’ spending on groceries and to secure new members. In addition to the Whole Foods markets which Amazon acquired in 2017 for around $13 Billion according to the website they have 10 Amazon Fresh locations already open in Southern California and in the greater Sacramento area it appears there are at least 4 stores planned with likely more in the works. Rumored locations include the former Toys R Us on Stanford Ranch in Roseville, Country Club Centre at Watt and El Camino, Sunrise Village in Citrus Heights, and The Ridge in Elk Grove. "
Self Storage
"The self-storage sector continues to remain a strong performer for real estate developers and investors as rents have increased as much as 10 to 15% or more over the past year with an increase in occupancy. In the greater Sacramento area, there are several new storage projects in various phases of development, including a new 121,000 square foot facility in Natomas proposed in late 2021 by USAA Holdings which was fueled by the new housing in the area. Even with the increased supply planned for this year the demand remains strong. "
https://www.bizjournals.com/sacramento/news/2021/08/25/self-storage-planned-south-natomas.html
Grocery Outlet
"With annual sales exceeding $2 billion Emeryville, California based Grocery Outlet opened 36 new stores in 2021 and continues its expansion with plans to open an additional 28 new stores this year for a total of over 400 in California, Washington, Oregon, Pennsylvania, Idaho and Nevada. This high-growth discount grocer of name-brand and fresh products sell their product through a network of independently owned and operated stores. to learn more, check out caprivers.com ."
Sacramento multifamily continues to remain strong
"With the Sacramento population continuing to grow and home prices increasing the multifamily market is poised for continued growth. The recent record-breaking sale of 1430 Q Street in Sacramento for $761,330 per unit, which has an average rent of more than $3,600 per unit, to a San Francisco investor is just the latest example. Over the past decade, the average apartment rent in Sacramento has increased almost 80% with the average asking rent per unit at $1,729 according to Costar. To learn more, check out caprivers.com"
https://product.costar.com/home/news/shared/502188635?culture=en-US&source=sharedNewsEmail
First Washington Realty acquires Donahue Schreiber Realty
"First Washington Realty recently purchased 47 shopping centers totaling 6 million square feet from Costa Mesa based Donahue Schreiber Realty Group with a market value reportedly north of $3 Billion dollars. This acquisition increases their holdings to over 150 centers and gives them a strong representation on the West Coast. A number of the centers acquired are in Northern California including, Natomas Marketplace, Rocklin Crossings, Rock Creek Plaza, Park Place, Pavilions, Sunridge Plaza, Laguna Creek and Crossroads, Sienna Ridge, and Gold River Town Centre. To learn more, check out Caprivers.com"
High Performing Retail Remains Popular
"Investor demand for high-performing class A retail centers continues to remain strong. As an example, the “Nut Tree Plaza” in Vacaville, California originally built in the 1920’s recently sold for around $124 million to two local northern California family investors. Nella Holdings of Auburn (formerly the parent company of Flyers Energy Group) and Tower Investments of Woodland. The center was renovated between 2006 and 2008 and it still features a carousel and the original Nut Tree Railroad train. To stay current on what’s happening in the market contact caprivers.com"
https://www.bizjournals.com/sacramento/news/2022/04/22/nut-tree-sale-price.html
Sleep Train Arena
"Plans have been announced for the former 183-acre Sleep Train Arena in North Natomas. California Northstate University has submitted a formal application to the City of Sacramento which includes a major 14 story 730,000 square foot level II trauma center hospital facility with helipad, college dormitories, childcare center, senior residential care facility, and supporting office, commercial, and retail uses totaling over 1.6M square feet of new construction. The project will be built in phases with the first phase being the main 14 story hospital building. The overall project is still in the early phase going through the City of Sacramento approval process, so I wouldn’t anticipate seeing any major construction activity until next year. For news on more commercial real estate projects check out caprivers.com"
https://railyards.com/blog/sleep-train-arena-to-be-rebuilt-into-hospital-and-medical-school
Dutch Brothers
"Dutch Bros. coffee… started with a single coffee cart in Oregon almost 30 years ago and now they are publicly traded on the New York Stock Exchange, are valued at around $6 Billion, and maintain a company culture most company’s envy.
Dutch Bros currently has over 500+ stores, an additional 112+ planned for 2022 and a number of those are in the Sacramento area. A few locations in the works include one in Meadowview at Florin and Freeport, Watt and La Riveria, and a relocation on Auburn Blvd. to an existing drive-thru location.
Expect to see more growth from Dutch Bros in the region"
Supply Chain
"Supply Chain Issues, in part from declining production and increased demand, as well as Labor Shortages are major factors in commercial retail and industrial lease rate increases we have been experiencing. Unfortunately, this upward trend will likely continue in the near future. According to a prominent local Sacramento contractor they have experienced increases in project costs from 20 to 35%, or more in some cases and with continued inflationary pressures it will only make the situation worse. According to research firm Costar Group the impact on industrial rental rates has been nearly 10% annual increases and they are reporting that steel prices have increased over 120% year over year."
Raising Canes
"The chicken fight is on as more chicken centric restaurants open and battle for market share. One of those concepts is Raising Cane’s Chicken Fingers which recently celebrated opening its 600th location making it one of the Fastest Growing Chicken Chain’s in the country. According to Restaurant News they are planning on opening 100 new locations across 10 markets in the coming year. Here in greater Sacramento, they recently opened a new location in Elk Grove at 9164 E. Stockton Blvd. adjacent to In N Out Burger which is their 4th location in the Sacramento region. More concepts are coming, including Dave’s Hot Chicken… to learn more check out caprivers.com "
https://www.nrn.com/take-away-sam-oches/how-raising-cane-s-sustaining-momentum
Local Kitchens
"Local Kitchens, a Bay Area based micro food hall is scheduled to open in Roseville on Fairway Drive later this month. Local Kitchens allows you to mix and match dishes from multiple local restaurants for pickup, delivery, or dine-in all-in-one orders. Local restaurants including Curry Up Now Garden of Eat’n, The Melt, Nash’s & Proper, and Senior Sisig. Capital Rivers is also proud to represent Nash & Proper as well as The Melt on their other restaurant expansion plans. To learn more, check out caprivers.com "
https://www.localkitchens.com/
https://www.bizjournals.com/sacramento/news/2021/11/24/local-kitchens-planned-roseville.html
Fry’s Electronics
"After nearly 36 years in business Fry’s Electronics, Inc. closed its 31 stores as a result of changes in the retail industry and the Covid-19 pandemic. Some of the stores are now being redeveloped including the 155,000 square foot Fry’s in the Sacramento Natomas area that is planned to be converted into an industrial building with an additional 110,000 new industrial building in the parking field. Current vacancy rate in the trade area is 2% for industrial space. To learn more, check out caprivers.com"
1031 Exchange
"Major changes to the 1031 Exchange or Like-Kind Exchanges are once again included in the current Administrations proposed budget for 2023. If past the new rule would cap the capital gains deferral at $500k for an individual and $1M for a couple which would spell disaster for the commercial real estate industry and overall U.S. economy. In addition to the 1031 there are other strategies that should be considered such as cost segregation, bonus depreciation, change in accounting method, as well as other financial and non-financial factors. To learn more contact us at Caprivers.com"
https://home.treasury.gov/system/files/131/General-Explanations-FY2023.pdf
Multifamily investments have record Q1
"Multifamily investment in Q1 hit an all-time high, accounting for the strongest quarter on record and increasing 56% year-over-year to $63 billion according to Globe Street. Overall vacancy rates also fell by 2.5% year-over-year to hit a record low of 2.3% with average net rents increasing 15.5% from the prior year. Looking forward, with more multifamily inventory coming online, inflationary pressures, and debt volatility we anticipate cap rates to move upwards. For more details check out caprivers.com"
https://www.globest.com/2022/05/13/multifamily-investment-soars-to-new-heights/
