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Michael Stoler Real Estate Newsletter The Stoler Report-New York's Business Report The Real Estate Market in 2013: Or have we

06/03/2013

This week join Michael Stoler on the television productions of New York Real Estate TV, LLC.

Monday, June 3rd,  Michael Stoler's guest on "Building New York-New York Life Stories" is Joseph Mattone, Chairman, Mattone Group.

On Tuesday evening, June 4th, the topic of the Stoler Report-New York' Business Report  is "The Real Estate Market in 2013: Or Have we returned to 2007?

My guests on the broadcasts include Thomas Lydon, Gino Martocci, Mitch Rutter, James Orphanides

The Stoler Report-New York's Business Report now airs a total of 8 times a week on CUNY TV in New York City.

Building New York: New York Life Stories, air 8 times a week in New York City and around the nation on Tuesday night on JLTV & DIRECTV.

Every Monday morning  you will receive the latest real estate article by Michael Stoler on the state of the market an information about the upcoming guests on the productions of New York Real Estate TV, LLC
Sincerely
Michael Stoler

Investors very bullish on ownership of  bank branches

Willy Sutton was one of the most notorious bank robbers of the 20th century of New York City banks. For his talent at executing robberies in disguises, he gained the nickname, "Willie the Actor" and "Slick Willie" Sutton is known for the urban legend that he said that he robbed banks "because that's where the money is". In the 21st century, a number of local and foreign investors in commercial real estate are interested in New York City banks, in ownership as opposed to robbing the premises.  

Investors from around the world continue to be interested in ownership of commercial real estate in New York City, especially if the property is a branch of a strong financial institution.

In May, Markland Holdings, a private Irish investment group, sold a portfolio of 47 Citibank branch locations spread across the metropolitan New York City area. All of the properties, comprising 157,000 square feet were sold to Path Land Holdings, LLC, a group of individual investors. The purchasers paid $97.2 million, or approximately $620 per square feet.

All of the branches which are located in the five boroughs as well as Westchester, and Nassau and Suffolk Counties of Long Island are leased to Citibank under long term triple net leases. According to CoStar Markland Holdings acquired the portfolio from Citibank in April 2008 for $87.5 million.

Earlier this year, Madison Capital, a joint venture with an institutional owner, acquired a portfolio of five Citibank retail bank branches in the New York metropolitan area. They paid $80.5 million to FGP West Street. The branches were located in Manhattan, Brooklyn, Queens and Bronx.

The locations included the 20,256 square foot classical banking hall located in the heart of Brooklyn Heights at 181 Montague Street, as well as a free standing branch at 123 East 86th street; a retail condominium unit at 2261 Madison Avenue at East 91st Street; 107-01 71st Avenue, a multi-tenanted property anchored by a Citibank branch in Forest Hills; and 1800 Williamsbridge Road, a 13,517 square foot retail property, co-anchored by Citibank and Walgreens in the Morris Park section of the Bronx.

Can you imagine sales of nearly $1,000 per square foot at Grocery Markets

It looks like it is a clash of the titans: from Austin, Texas, is Whole Foods Market and from the Upper West Side of Manhattan is Fairway Market.

Whole Foods who entered in the New York City nearly a decade ago, recorded revenues for the 28 week, first half of the fiscal year, sales climbed by 13.6 percent to $6.9 billion. Local contender, operates 12 high volume locations in the Greater New York City metropolitan area, increased sales climbing 38.3 percent in the in the fiscal year 2012 to $554.9 million.

While both companies are growing by leaps and bounds, the average week's sales in Whole Foods were $725,000, with sales per gross square foot of $991. While many of the Whole Foods markets are larger in physical size as compared to Fairway, RetailSales 2012 study, reported that Fairway Market ranked in tenth position in the highest sales per square foot of all retailers at $1,081.

Retailers are increasing sales each and every year as reported by latest research by RetailSales. Some very interesting statistics are presented below on the state of the retail industry.

 

RetailSails 2012Chain Store Productivity Guide reported the highest sales per square foot by segment

 

Industry Segment          Retailer                       Sales per square foot

Apparel Stores                lululemon athletica         $1,936

Auto & Marine Parts        AutoZone                      $  264

Department Stores:         Neiman Marcus             $  508

Discount & Variety:         PriceSmart                    $1,008

Drug, Health & Beauty:   CVS                              $   676

Electronic                      Apple                             $6,050

Furniture & Home  

     Furnishing               Select Comfort                 $1,314

Grocery &  

Convenience                Fairway Market                 $1,081

Home Improvement       Lumber Liquidators            $393

Hobby, Craft, T

Toy, Game                   Brookstone                     $   415

Luxury, Jewelry  

& Accessories             Tiffany & Co                     $3,017

Miscellaneous  

Specialty                     Teavana                           $  893

Off-Price                      TJ Maxx/Marshalls           $  285

Shoe Stores                 Steve Madden                 $  887

Sporting Goods            Cabela's                         $  352

Highest Sales per Stores  

Ranking           Company                                             Sales per store

1                      Costco Wholesale                                 $137,170,000

2                      Sam's Club                                           $78,551,000

3                      Neiman Marcus (full line)                        $72,959,000

4                     Walmart U.S.                                         $68,665,000

5                     Fairway Market                                      $68,070,000

6                     PriceSmart                                            $67,086,000

7                     Nordstrom (full line)                                $65,720,000

8                     BJ's Wholesale                                     $56,330,000

9                     Apple Stores                                         $51,148,000

10                   Village Super Market                              $50,122,000

Fastest Growing retailers (one year change in Store Sales)

Ranking           Company             Store Sales   Yr over yr change          

1                      Vera Bradley         $139,000,000                 79.2%

2                      Michael Kors         $720,000,000                 77.9%

3                      Gilly Hicks             $78,000,000                  58.7%

4                      Under Armour        $317,000,000                 51.8%

5                      Francesca's           $246,000,000                 48.9%

6                        Five Below             $346,000,000                 48.9%

7                      Mattress Firm        $817,000,000                 42.9%

8                      lululemon athletica$943,000,000                 38.6%

9                      Kate Spade           $154,000,000                 34.0%

10                    Select Comfort       $757,000,000                 32.6%  

The Hot, Hot, Hospitality Market: US hotels 2012 profit just under 2007 peak

The hospitality industry is on fire in New York as well as around the nation.  STR reported that the U.S. hotel industry recorded a profit of $58 billion last year, just short of the peak level in 2007, according to the recently released STR Analytics' 2013 Host Almanac.

Based on almost 6,000 hotels, the hospitality industry's total revenue increased 13.4 percent in 2012 to an estimated $162 billion with net operating income just under $40 billion.

Based on almost 6,000 hotels, the industry's total revenue increased 13.4 percent in 2012 to an estimated $162 billion with net operating income just under $40 billion.

"While it's encouraging that the gross numbers for 2012 is near record highs, many properties are still not back to peak profit," STR Analytics director Carter Wilson said in the report. "Luxury and upper upscale properties are leading the charge back to profitability, but there are still a lot of struggles in the middle and lower chain scale segments."

Even though profits increased, revenue growth was moderate for the industry, increasing 5.2 percent in 2012, compared to 8.8 percent in 2011, STR reported.

   Other highlights of the 2013 Host Almanac Report

  • Full service hotels reported an average occupancy of 70.2 percent and an average daily rate of $159.12 in 2012.
  • On average, full service hotels generated $244.76 in total revenue per occupied room nigh, up from $240.08. Full service, chain affiliated hotels checked in at $237.26 per occupied room night while independent properties reported $336.16 per occupied night.
  • Gross operating profit for full service properties was 34.1 percent, compared with 31.5 percent in 2011.
  • Gross operating profit was approximately $21,344 per available room and $83.57 per room night.
  • Overall in 2012, limited service hotels recorded occupancy of 70.7 percent, slight up from 70 percent in 2011, and the Average daily rate was $92.515 compared with $89.95 in 2011.
  • Limited-service hotels reported a GOP of 49.9 percent, which was an increase from 48.8 percent in 2011. These hotels generated US$47.44 in GOP per occupied room night and $12,129 per available room.
  • Franchise fees in chain-affiliated, limited-service hotels accounted for 2.6 percent of the undistributed operating expenses, which equates to $2.42 per occupied room night.

For the first time, STR collected over 90 additional line items of income and expense from participating properties. Highlights from the additional lines reported include:

   Luxury hotels outperformed upper-upscale hotels in banquet revenue (per available room) on a 2:1 basis.

  • Luxury hotels also had a significantly higher capture of revenue from cancellation fees than any other class.
  • For properties reporting over US$5,000 in F&B revenues, 83 percent of these hotels registered a profit in the F&B department (including outlets, banquets, room rental, in-room dining, and mini-bars combined). Luxury and upper upscale properties were most likely to be profitable.
  • For reporting full-service hotels, Internet revenue per-occupied-room ranged from $0.48 at upscale properties to $1.36 for luxury hotels.
06/03/2013 - 18:56

Source

Stoler Report

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