- Holiday E-Commerce Returns May Reach $29 Billion, Impacts U.S. Logistics Markets “Holiday season sales beget returns, but e-commerce sales more so says a new report by CBRE Group, Inc. Based on that fact, CBRE Group, Inc. has released a report outlining the methods that retailers use to handle returns of e-commerce merchandise and recent improvements of those processes. Based on standard return rates for online sales, CBRE calculates that the total value of returned goods bought online this holiday season will range from $14 billion to nearly $29 billion. Retailers' processes for handling online returns, called reverse logistics, have added importance as e-commerce continues to grow by double-digit percentage rates on a year-to-year basis. Research firm eMarketer predicts that online sales will increase by 17 percent this holiday season to $95 billion. The return rate for goods bought online typically ranges from 15 percent to 30 percent, due to online shopping habits such as buying multiple versions of a product and deciding later which to keep. ‘We'll likely see retailers make progress this year in whittling their online return rates because they have more and better data from past seasons to predict what their customers will buy and keep,’ said Joe Dunlap, CBRE's Managing Director of Supply Chain Services. ‘Still, big volumes of returns are a fact of life in e-commerce, which leaves retailers with expensive decisions regarding whether to restock, liquidate or destroy returned merchandise.’” (World Property Journal)
- Family resists Google's campus sprawl despite offer to buy farm for millions “Bay Area family is holding on to its ramshackle farmstead in the heart of Google’s sprawling headquarters despite reason to believe it has been offered $5m to $7m by the tech giant for the tiny patch of land. The land – which is home to battered pickups, a crumbling ice house, and a handful of renters – is now surrounded on all sides by the tech company’s more than 25-acre campus in Mountain View, California. Measuring less than an acre, the property is also home to fig, tangerine, avocado and ancient pepper trees, many of which were planted and harvested by the late patriarch of the family, Victor Molinari, who died five years ago. His surviving relatives appear disinclined to sell. ‘Right now we’re living,’ said Leonard Martinelli, 49. “We don’t need the money. Right now it’s not for sale.” His sister, Sandra Martinelli Bilyeu, 43, added: “If we keep it, we keep our history.” But it is not only the family’s history that is being preserved. Silicon Valley may now be synonymous with tech behemoths such as Google, Apple and Facebook, but not so long ago it was miles of lush farm fields where plums, cherries and tomatoes grew in abundance.” (The Guardian)
- Most Americans think homeownership is unaffordable for young people, survey finds “Most Americans believe homeownership is unaffordable for young people, even as a larger majority consider it the best long-term investment and something they want for themselves. Homeownership is at multi-decade lows, and Americans - especially younger people and people of color - face stiff headwinds in owning a home, including the perception that ownership may be out of reach, according to a new study from the Pew Research Center. While overall homeownership has been falling for over a decade, the one age group in which it’s increased is among those over 65. The average age of a head of household has shifted to 51 today from 45 in 1994, the year Pew defines as the start of the massive expansion in ownership that eventually caused the housing bubble to burst a decade later. ‘Today’s homeownership rate is being propped up, in part, by an aging America,’ Pew economists note.” (MarketWatch)
- In Brief: U.S. Renters Have Higher Credit Scores, More Access to Debt “According to a report from American credit bureau TransUnion, U.S. renters, as a group, are getting older, but they also have better credit scores and greater access to debt than previously. The study analyzed the credit behavior of 631,000 renters who moved during the second quarter of 2015 over the 12 months following their moves with a similar group who moved during the second quarter of 2009. Here are a few of the findings: Renters have better credit scores. TransUnion found that 38.6 percent of the 2015 renters had a prime or better credit score (660 or above), compared with 26.2 percent of the 2009 cohort.” (Urban Land Magazine)
- CVS Health to close 70 stores “CVS Health has embarked on a three-step streamlining initiative with a goal of saving approximately $3 billion from 2017 to 2021. Two-thirds of the savings will be seen in CVS’s retail/long-term care segment, with the remaining one-third of savings seen in the pharmacy benefits manager category. The new initiative will include the closing of 70 stores in 2017. The store closings should provide a $265 million benefit to CVS, mostly in 2017, and will help CVS deliver higher returns for shareholders over the long-term,” Dave Denton, executive VP and CFO of CVS, stated during Thursday’s CVS Analyst Day. Denton also said the Woonsocket, R.I.-based retailer will ‘continue to provide convenient local access to the millions of patients we serve on a daily basis.’ CVS also is enhancing efficiency of corporate shared service, which involves consolidating similar activities across business units. The retailer has already begun the process, with Denton announcing early promising results, including 15% to 20% reductions in labor costs for relocated activities.” (Chain Store Age)
- Why Walmart is doubling down on its commitment to climate change “In 2005, Walmart announced a goal to be fully supplied by renewable energy sources, and to work to avoid and reduce greenhouse gas emissions. We didn't set this goal because anyone forced us to. We set it because we wanted to help address climate change and improve lives, while also strengthening our company and reducing expenses. We thought it would be a win-win: good for society, and good for Walmart. Eleven years later, that's exactly what we've seen. By investing in solar energy, for example, Walmart has contributed to less greenhouse gas emissions, and helped create thousands of jobs for American solar companies. Walmart is now one of America's leading commercial solar and on-site renewable energy users, and gets about 25 percent of its global energy from renewable sources. To give another example, by doubling the efficiency of our U.S. fleet from 2005 to 2015, Walmart avoided the emission of nearly 650,000 metric tons of CO2, while also saving nearly $1 billion in the past fiscal year.” (CNBC)
- Miami Beach wants to know if you’re renting your condo on Airbnb “The city of Miami Beach wants to know if you plan to rent your condo on Airbnb and other short-term rental platforms. City law permits short-term rentals only in certain areas of the Beach. Neighbors blame Airbnb and its competitors for noisy parties thrown by guests. The powerful hotel industry says the services are unfair competition because hosts don’t pay local resort taxes. The Beach has responded by cracking down on illegal rentals with fines as high as $20,000 per violation. On Wednesday, commissioners voted to further tighten regulations on short-term rentals. In order to advertise units on Airbnb and other sites, homeowners will now have to submit an affidavit to the city affirming that their property lies in an area approved for short-term rentals and that they have obtained a business tax receipt and resort tax account. They will also need to show that their condo association allows short-term rentals. Fines for violators start at $1,000.” (Miami Herald)
- Sign of a Real Estate Slowdown as Queens Clock Tower Changes Hands “Things are getting choppy in New York’s once-rocketing residential real estate market. Last week, the developers of what was planned as the city’s tallest tower outside of Manhattan gave up and sold their site next to the historic clock tower building in Queens Plaza to the Durst Organization for $173.5 million. The developers, Kevin Maloney and Kamran Hakim, spent nearly three years buying land in Long Island City for the $750 million skyscraper. But, Mr. Maloney said in an interview this week, ‘we didn’t have the horsepower to get it done.’ The Dursts said they would erect a rental tower that may be just as tall as Mr. Maloney had planned, 914 feet.” (The New York Times)
- Yardi Matrix: DC’s Changing Workforce “Washington, D.C.’s multifamily market is teeming with growth as the new developer president prepares to hit town. The capital has attracted young professionals amid broad-based growth in the business, government, health care and education segments. With no signs of an economic slowdown, the outlook for multifamily is positive, but the heavy supply pipeline is expected to put a damper on rent growth in upcoming years. It’s not just D.C. Northern Virginia is also seeing strong increases in rents, transaction volume and development. The new 23-mile Silver Line connecting Washington Dulles International Airport to Ashburn, Va., is helping to simplify commuting for workers in the city, boosting suburban areas even more. The metro’s attraction extends to investors, which have bought $2.7 billion worth of apartments year-to-date after last year’s cycle-high $3.5 billion. As a first-tier market, the metro remains a top attraction for international investment, which has caused prices to spike. Fittingly, with a real estate developer moving into the Oval Office in 2017, the apartment pipeline is a massive 172,000 units, with most supply targeted to the high end. There will be a great deal of change in Washington with a new administration, but demand for apartments will not abate. Multifamily rents grew by 3.4 percent year-over-year as of October, and we expect moderate gains to continue.” (MultiHousing News)
- Overhaul for North Hollywood’s Laurel Plaza approved “The expansive mixed-use complex incorporating over 600 apartments, a movie theater, office space, and, of course, shops on the site of North Hollywood’s Laurel Plaza shopping mall got the stamp of approval from city officials this week, reports the Daily News. Construction is expected to start by early 2017 on the retail component of the 25-acre development near the 170 Freeway and Laurel Canyon Boulevard. The new complex will be called NoHo West. Developers Merlone Geier Partners and GPI Company will devote one-third of the site’s space to rentals—642 of them. About 100 more were originally proposed, but “the developer was asked to increase the emphasis on retail and commercial areas at the site,” says the News. The project will also include 190,000 square feet of offices, almost 300,000 square feet of retail and restaurants, and a gym and movie theater. The retail portion of the project is expected to be done first, in 2019, but the timeline for the residential element hasn’t been hammered down.” (Los Angeles Curbed)
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