A Statement On Ukraine from Kevin Maggiacomo, SVN President and CEO

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The Fed view on the CRE industry

During the second session of the 2019 SVN Annual Conference in Miami, Kevin Donahue of SVN CompassRock interviewed Brian Bailey, CCIM, CRE, Subject Matter Expert at the Federal Reserve Bank of Atlanta, to get a regulatory perspective and the view from the Fed.

 

2018 was great year…but growth will slow

Brian Bailey thinks the CRE industry is doing well, and 2018 was a banner year. However, growth is slowing. Tax effects will fade, and the country will slow from 3% GDP, but it  will still experience solid growth. Currently, indicators in the economy are good, as 230,000 jobs are created each month, and unemployment keeps coming down.

 

There’s more capital, and more alternative lenders

Banks have more capital. The economy is seeing an improved volume of loans. Regulation has accomplished the goals needed. However, Brian Bailey says that one surprising thing has been the rise of alternative lenders and non-banks. Non-banks have experienced a significant growth of 40- 44%. The market is embracing new financing alternatives. The caveat with non-banks is that we have less transparency into their dealings, and they can often compete with smaller banks.

 

Inflation coming back?

The data shows a potential for inflation coming back. Wages are also increasing. Auto lending and student loans are increasing. There is plenty of borrowing that is taking advantage of low rates, especially in auto financing. The Fed president has indicated there may be one rate increase later this year.

 

CRE market overview

Real estate continues to be validated as an asset class, which is a good dynamic for the CRE business.

Brian Bailey, Federal Reserve Bank of Atlanta

The commercial real estate sector is a lagging adapter of technology, and so is retail.  The economy has shifted from goods to services, which is obvious when we realize that there have been 4,300 store closings nationwide.  The amount of retail square footage per person in the United States is 24 feet, which is perhaps too high. New retail projects will have to be re-thought, perhaps re-purposing existing retail to medical uses, or perhaps to address the shortage of affordable housing.

The industrial sector is going to continue to grow. Office space costs have increased but tech has enabled tenants to take less space, in other words we have higher rates with more efficiency. In the next decade there will be a rise of alternative property types, like skilled nursing assisted living. Banks will be lending in more of those spaces.

 

Will this downturn be like 2008?

The downturn is inevitable. However, Brian Bailey thinks this will be a softer landing, and not a huge loss like in 2008.

 

Commercial Real Estate Markets Expanding in 2017

Commercial real estate markets have been generally growing in terms of pricing, rental rates, and occupancies since approximately 2011 and many market participants are beginning to openly wonder where the market is in the “cycle”.

Since the topic of market cycles can be somewhat misunderstood, we want to offer some clarification before presenting our assessment. Some investors believe that markets experience cycles based on some uniform period of time; such as every “X” years. In reality, markets, such as those for commercial real estate, move from peaks to valleys based on changes in supply and demand and any observation of timing is purely coincidental. An asset will see a “peak” and then decline when supply exceeds demand and this is when investors should look at changes in fundamentals to determine the relative risks and rewards of their investment due to cyclical forces.

CRE Markets Remain Healthy in Early 2017

With data available through the end of 2016, it is easy to see that most commercial real estate asset types are in the middle of the expansion phase of the real estate cycle. These are periods of long term growth in rents and declines in vacancy. According to REIS, all four major real estate classes experienced rent growth in 2016; 3.6% for apartment, 2.0% for retail, 2.4% for office and 2.2% for industrial. Office and industrial markets are experiencing the most absorption and improvements in occupancies and thus appear “earliest” in the expansion phase with year-end vacancy rates of 15.8% and 10% respectively. Retail vacancy rates remained flat at 9.9%, which given the number of “big box” closures, is actually impressive and masks the reality that many retail properties are actually experiencing rental rate growth and near full occupancies. The apartment sector, which began 2016 as the most watched sector given its 1.8% increase in supply, ended at 4.2% vacancy which is unchanged from 2015. Early 2017 data from Yardi Matrix shows modest rent growth has resumed which when considered with the rate of job creation, actually suggests that the apartment sector is not anywhere near as oversupplied as some have feared. However, relatively speaking, it is certainly the “latest” in the expansion phase. Overall, in early 2017 the fundamentals of commercial real estate markets still appear to be relatively healthy. In addition, given the current growth and optimism in the economy, they have room left to run in most situations.

2016 Transaction Volume is 3rd for Highest Recorded CRE Sales Activity

Prices of commercial real estate are a result of interactions between space markets (supply and demand) and the capital markets (competition for investment dollars). According to Moody’s and Real Capital Analytics, commercial real estate prices grew 9% in 2016 for another record breaking year. However, transaction volume was down 11% in 2016, but the year still ranks third after 2015 and 2007 for highest recorded commercial real estate sales activity. Overall, increases in interest rates and the 2016 decline in sales volume suggest the capital markets may put less pressure on price growth in 2017 than in recent years. The question of what cap rates will do given recent rate rises remains open but early evidence suggests that spreads are compressing and cap rates have shown minimal increases, however, this is still “too early” to call.

As of mid-February 2017, the commercial real estate markets appear to remain in expansion mode and 2016 was by all measures, a great year. If growth sustains, as the stock market is suggesting with its setting of new record highs every so often, fundamentals of commercial real estate should keep on moving upward as well. Census Bureau data showed that 2016 was a year for growth in construction spending; up 7.8% for nonresidential (commercial) and up 4.5% for residential (includes apartments). Therefore, there is more new supply coming but all the data suggests there is more than sufficient demand to keep the market in balance and growing.

 

Los Angeles, CA | 2016 Top #CRE Markets to Watch: Industrial

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Industrial Markets to Watch. Not the largest or the most actively contested markets, the 2016 Industrial Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Industrial Market to Watch: Los Angeles, CA

Los Angeles - top industrial market to watchLos Angeles is one of the largest, most dynamic cities in the United States and its economy has fully recovered, with a normalized level of unemployment at 5.5% as of January ‘16 and annualized total employment growth of 2.3%, according to the Bureau of Labor Statistics. Its industrial space market is one of the best performing in the nation due to the growth in container and freight traffic from the port as well as inbound air cargo from Asia. The Trade, Transportation, and Utilities sector is growing at an annualized rate of 1.7%, meaning that further growth and expansion is possible. Of course, the reliance on trade could cause a contraction in the industrial sector with global pressures, but this is unlikely as much of the trade and distribution are import goods that will benefit from a strong US dollar.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top industrial markets, download the full version of the 2016 Industrial Market Outlook report here.

2016 Industrial Market Outlook

[bctt tweet=”Los Angeles, CA is one of 2016’s top industrial #CRE markets to watch.” username=”svnic”]

Orlando, FL | 2016 Top #CRE Markets to Watch: Retail

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2016 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Retail Market to Watch: Orlando, FL

Orlando - top retail market to watchOrlando continues to be one of the fastest growing markets in the nation, fueled by record tourism and new business openings and relocations. Unemployment remains stable at 4.7% as new jobs are being created at a 4.9% annualized rate, according to the Bureau of Labor Statistics. Population has also boomed by 9.9% from 2010 to 2014, according to the Census Bureau, creating the demand for more retail real estate. Top employment sectors include Construction, Professional and Business Services, Manufacturing, Educational and Health Services, and Leisure and Hospitality, with annualized growth rates of 14.5%, 8.6%, 7.3%, 4.6%, and 4.4%, respectively. This broad-based growth will enhance the health of the retail real estate sector in 2016 and beyond for both tourist-focused and resident-focused establishments.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top retail markets, download the full version of the 2016 Retail Market Outlook report here.

2016 Retail Market Outlook

[bctt tweet=”Orlando, FL is one of 2016’s top retail #CRE markets to watch.” username=”svnic”]

Denver, CO | 2016 Top #CRE Markets to Watch: Office

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Office Markets to Watch. Not the largest or the most actively contested markets, the 2016 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Office Market to Watch: Denver, CO

Denver - top office market to watchDenver remains one of the most rock-solid metropolitan economies in the nation with 3.0% unemployment in January ‘16, according to the Bureau of Labor Statistics, while maintaining steady, slow growth that has total employment at record highs. The office market is equally steady with a relatively low level of vacancy and fair asking rents. This stability and growth should persist in 2016 for the office sector as key employment groups – Financial Activities, Professional and Business Services, and Information – are all showing strong-to-decent annualized growth of 3.9%, 3.2%, and 1.8%, respectively. Denver maintains a diversified set of economic base activities including aerospace, bioscience, and energy, just to name a few. As such, the office market is likely to withstand any negative impacts of global uncertainty and oil price declines for the foreseeable future.

Advisor Insights: SVN | Denver Commercial

SVN Advisors at SVN | Denver Commercial have some office market highlights to share:

  • Over 2 million square feet of newly delivered space is coming on the market, temporarily inflating vacancy rates.
  • Energy industry impact on office vacancy is significant as energy prices stay at their low prices. Sublet opportunities are up, and many energy company offices have closed completely. Vacancy rates have risen to mid-to-high teens.
  • Mixed use, co-work spaces continue to flourish, especially in the burgeoning CBD area. Conversion and re-purposing of old warehouses and factories is prevalent in the market.
  • Denver is creating jobs, with over 45,000 new positions in the last twelve months. Demand for office should rise concurrently with the job creation trend. Denver has become a desirable 18 hour city that attracts top talent in many industries.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top office markets, download the full version of the 2016 Office Market Outlook report here.

2016 Office Market Outlook

[bctt tweet=”Denver, CO is one of 2016’s top office #CRE markets to watch.” username=”svnic”]

Phoenix, AZ | 2016 Top #CRE Markets to Watch: Multifamily

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Multifamily Markets to Watch. Not the largest or the most actively contested markets, the 2016 Multifamily Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Multifamily Market to Watch: Phoenix, AZ

Phoenix - top multifamily market to watchPhoenix experienced significant gains in overall employment in 2015 that moved the number of jobs significantly above pre-recession peaks as unemployment fell to 4.6% in January ‘16 with continued annualized employment gains of 3.6%. The population grew by 6.2% from 2010 to 2014, according to the Census Bureau, helping to fuel new demand for apartment units. The city utilizes approximately 46% of its housing units as rentals and has relative affordability with high quality of life making the market a prime one to grow in 2016 and beyond, with rents expected to grow over 5% this year. The leading employment sectors are Information, Construction, Financial Activities, Education and Health Services, and Professional and Business Services, growing at annualized rates of 7.6%, 6.3%, 5.3%, 5.2%, and 5.1%, respectively.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top multifamily markets, download the full version of the 2016 Multifamily Market Outlook report here.

2016 Multifamily Market Outlook

[bctt tweet=”Phoenix, AZ is one of 2016’s top multifamily #CRE markets to watch.” username=”svnic”]

Knoxville, TN | 2016 Top #CRE Markets to Watch: Industrial

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Industrial Markets to Watch. Not the largest or the most actively contested markets, the 2016 Industrial Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Industrial Market to Watch: Knoxville, TN

Knoxville - top industrial market to watchThe Knoxville economy is extremely steady given its diverse economic base and thus experienced relatively low effects of the recession. The city now has a 4.5% unemployment rate as of January ‘16, with overall employment growing at an annualized rate of 2.5%, according to the Bureau of Labor Statistics. The industrial sectors of Knoxville are all showing marked strength, including Manufacturing and Trade, Transport, and Utilities growing at annualized rates of 4.5% and 4.1%, respectively. Additionally, the Mining, Logging, and Construction sector is growing at a rapid 10.2% annualized rate, further fueling the market. The mix of defense, research, and industrial manufacturers gives Knoxville strong power to grow its industrial real estate in 2016 and beyond.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top industrial markets, download the full version of the 2016 Industrial Market Outlook report here.

2016 Industrial Market Outlook

[bctt tweet=”Knoxville, TN is one of 2016’s top industrial #CRE markets to watch.” username=”svnic”]

Nashville, TN | 2016 Top #CRE Markets to Watch: Retail

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2016 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Retail Market to Watch: Nashville, TN

Nashville - top retail market to watchNashville’s economy continues to boom, as employment sets new record highs with continued 4.0% annualized growth that has brought the unemployment rate to a low of 3.7% as of January ‘16, according to the Bureau of Labor Statistics. This corresponds with a 6.7% increase in population from 2010 to 2014, according to the Census Bureau. This growth is putting pressure on retail real estate as fundamentals improve in face of steady growth; a trend expected to persist in 2016 and beyond. The fastest growing employment sector is Mining, Logging, and Construction followed by Professional and Business Services, then Financial Activities and Information, with annualized growth rates of 9.4%, 8.7%, 4.5%, and 4.4%, respectively. This type of broad-based job growth is sure to boost all real estate sectors including retail.

Advisor Insights: SVN | The Genesis Group in Nashville, TN

SVN’s Nashville-based Advisors at SVN | The Genesis Group have some retail market highlights to share. Here’s what to look out for in Nashville’s retail market in 2016:

  • Strong demand for retail space
  • Declining vacancy
  • High rents
  • Competition for space
  • Very little inventory

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top retail markets, download the full version of the 2016 Retail Market Outlook report here.

2016 Retail Market Outlook

[bctt tweet=”Nashville, TN is one of 2016’s top retail #CRE markets to watch.” username=”svnic”]

Dallas, TX | 2016 Top #CRE Markets to Watch: Office

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Office Markets to Watch. Not the largest or the most actively contested markets, the 2016 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Office Market to Watch: Dallas, TX

Dallas - top office market to watchDallas remains one of the fastest growing employment centers in the nation, even with the energy price declines of 2015. According to the Bureau of Labor Statistics, the unemployment rate sits near record lows at 3.8% as of January ‘16, with the city creating over a half million new jobs since the recession. The office markets have fared well, as key office sectors of Financial Activities and Professional and Business Services have grown at strong annualized rates of 4.8% and 2.3%, respectively. Information has remained fairly flat at 0.4% annualized growth. As Dallas has become a modern international city with the help of the DFW airport, it is perhaps the best positioned market in the oil-producing region of the U.S. to weather any pain from the petroleum industry. The office market should remain stable and growing in 2016 and beyond.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top office markets, download the full version of the 2016 Office Market Outlook report here.

2016 Office Market Outlook

[bctt tweet=”Dallas, TX is one of 2016’s top office #CRE markets to watch.” username=”svnic”]

Philadelphia, PA | 2016 Top #CRE Markets to Watch: Multifamily

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Multifamily Markets to Watch. Not the largest or the most actively contested markets, the 2016 Multifamily Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Multifamily Market to Watch: Philadelphia, PA

Philadelphia - top multifamily market to watchJob growth in Philadelphia has brought the city back above pre-recession employment levels as unemployment stays steady at 4.8% as of January ‘16 with modest annualized employment growth of 2.1%, according to the Bureau of Labor Statistics. Population growth has been below the national average as the city only gained 2.2% from 2010 to 2014, according to the Census Bureau. Accordingly, demand for new apartment units is modest compared to other metros of similar size; yet the city does have a relatively high use of housing units as rentals at approximately 47%. Philadelphia does have an advantage in affordability, especially compared with other East Coast metros, and thus has growth potential with rents forecast to grow by over 3% in 2016. The city’s top sectors for job growth include Mining, Logging, and Construction as well as Professional and Business Services where are expanding at annualized rates of 8.2% and 3.7%, respectively.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top multifamily markets, download the full version of the 2016 Multifamily Market Outlook report here.

2016 Multifamily Market Outlook

[bctt tweet=”Philadelphia, PA is one of 2016’s top multifamily #CRE markets to watch.” username=”svnic”]

Greenville-Spartanburg, SC | 2016 Top #CRE Markets to Watch: Industrial

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Industrial Markets to Watch. Not the largest or the most actively contested markets, the 2016 Industrial Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Industrial Market to Watch: Greenville-Spartanburg

Greenville-Spartanburg - top industrial market to watchThe Greenville-Spartanburg region has experienced significant gains in its labor force, and overall employment is growing at a 2.6% annualized rate with unemployment holding steady at 4.9%, according to the Bureau of Labor Statistics. Key industrial sectors of Trade, Transport, and Utilities and Manufacturing are growing at annualized rates of 2.6% and 1.3%, respectively, setting up the industrial market for gains in 2016 and beyond. As South Carolina is well located for distribution in the Southeast, connected to ports, and unfriendly to labor unions, it is likely to continue to see expansion in its industrial sectors including those of Greenville-Spartanburg. Low cost of living and operating costs also serve to boost overall business development.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top industrial markets, download the full version of the 2016 Industrial Market Outlook report here.

2016 Industrial Market Outlook

[bctt tweet=”Greenville-Spartanburg, SC is one of 2016’s top industrial #CRE markets to watch.” username=”svnic”]

Miami, FL | 2016 Top #CRE Markets to Watch: Retail

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2016 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Retail Market to Watch: Miami, FL

Miami - top retail market to watchAfter facing a deep real estate and economic recession, Miami has fully recovered, has more employment than ever, and continues to grow at a 2.9% annualized pace, while unemployment remains stable at 5.2% as of January ‘16, according to the Bureau of Labor Statistics. This growth has been led by a new construction boom fed by foreign investment that has construction jobs growing at a 10.5% annualized rate, making it the far and away fastest growing sector. Population has also grown by 7.8% from 2010 to 2015, according to the Census Bureau, and is expected to continue growing, fueling the need for more retail development. Miami’s joint tourism, retirement, and business growth should force rental rates up and vacancies down in the retail real estate sector for 2016 and beyond.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top retail markets, download the full version of the 2016 Retail Market Outlook report here.

2016 Retail Market Outlook

[bctt tweet=”Miami, FL is one of 2016’s top retail #CRE markets to watch.” username=”svnic”]

Charlotte, NC | 2016 Top #CRE Markets to Watch: Multifamily

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Multifamily Markets to Watch. Not the largest or the most actively contested markets, the 2016 Multifamily Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Multifamily Market to Watch: Charlotte, NC

Charlotte - top multifamily market to watchThe multifamily market in Charlotte has experienced strong growth in demand as the city has gained 10.1% in population from 2010 to 2014, according to the Census Bureau. This has been fueled by significant job growth that has set new records substantially above pre-recession peaks, leading the present unemployment rate to sit at 5.3% as of January ‘16 with new job creation occurring at an annualized rate of 2.8%, according to the Bureau of Labor Statistics. Approximately 45% of the city’s housing stock is renter occupied. Thus, a good deal of the new population is likely to demand an apartment. Further, gross rents are below national averages, making Charlotte affordable and capable of seeing meaningful rent growth. New supply has grown approximately 4% in 2015 which will lower rent growth slightly in 2016, but still likely to be robust and above 4%. Many sectors are adding jobs at annualized rates above 4%, including Financial Activities, Professional and Business Services, and Leisure and Hospitality. However, this city does face a unique risk to continued growth from the new “bathroom” law, perceived very negatively by many; this could jeopardize new job growth and thus the market if firms choose to relocate or otherwise curtail operations in the state.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top multifamily markets, download the full version of the 2016 Multifamily Market Outlook report here.

2016 Multifamily Market Outlook

[bctt tweet=”Charlotte, NC is one of 2016’s top multifamily #CRE markets to watch.” username=”svnic”]

Dallas, TX | 2016 Top #CRE Markets to Watch: Industrial

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Industrial Markets to Watch. Not the largest or the most actively contested markets, the 2016 Industrial Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Industrial Market to Watch: Dallas, TX

Dallas - top industrial market to watchThe Dallas economy remains one of the strongest of the major metros in the nation with unemployment at 3.8% as of January ‘16 and steadily rising total employment at a 3.4% annualized rate, according to the Bureau of Labor Statistics. The fastest growing sector of employment in Dallas is an industrial space using Trade, Transport, and Utilities, which is growing at an annualized rate of 5.2%. This is the sector, where most of the 2016 and beyond gains in the industrial space market will be generated. Dallas has unparalleled airport and rail access making it an ideal business and distribution hub. In fact, the area surrounding the DFW airport is best poised to expand. Manufacturing is the weakest sector declining at a –1.6% annualized rate. This sector touches oil and gas production and exploration, and is thus most at risk for declines in 2016 and beyond.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top industrial markets, download the full version of the 2016 Industrial Market Outlook report here.

2016 Industrial Market Outlook

[bctt tweet=”Dallas, TX is one of 2016’s top industrial #CRE markets to watch.” username=”svnic”]

Las Vegas, NV | 2016 Top #CRE Markets to Watch: Retail

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2016 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Retail Market to Watch: Las Vegas, NV

Las Vegas - top retail market to watchAs tourism growth has once again led Las Vegas to new heights in overall employment, the unemployment rate is still falling as it sits at 6.5% as of January ‘16 while jobs are being added at a 2.5% annualized rate, according to the Bureau of Labor Statistics. Construction is the fastest growing employment sector at an 11.0% annualized rate followed by Education and Health Services at 8.1%. Las Vegas took a pause in population growth due to the recession but the pace is likely to grow in 2016 and beyond; still, the city grew by 5.0% from 2010 to 2014, according to the Census Bureau. Growth in tourism will spur the need for tourist-focused retail in popular locations like The Strip; however, overall growth will also increase demand for retail to service the local population. Over time, Las Vegas is likely to diversify from tourism and become a more balanced economy.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top retail markets, download the full version of the 2016 Retail Market Outlook report here.

2016 Retail Market Outlook

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Cincinnati, OH | 2016 Top #CRE Markets to Watch: Office

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Office Markets to Watch. Not the largest or the most actively contested markets, the 2016 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Office Market to Watch: Cincinnati, OH

Cincinnati - top office market to watchCincinnati’s economy is still struggling to find a consistent growth trend as unemployment started the new year at 5.2%, up from 3.9% in August of ‘15, according to the Bureau of Labor Statistics. Positive signs for the office market can be seen in Financial Activities and Information, which are growing at annualized rates of 3.6% and 2.2%, respectively; however the key office-using sector of Professional and Business Services is losing ground with –1.6% growth. Overall, the run of consolidations in industries such as banking, legal firms, etc. has still left Cincinnati with relatively high vacancies and lower lease rates. As the national economy grows, these relative pricing advantages should position Cincinnati to gain new tenants and users looking to locate in the region.

Advisor Insights: SVN | Commercial Realty Advisors, Inc.

SVN’s Cincinnati-based Advisors at SVN | Commercial Realty Advisors, Inc. have some office market highlights to share. Here’s what to look out for in the Cincinnati office market in 2016:

  • Continued rise in absorption
  • Declining vacancy rate
  • Continued recovery and stabilization

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top office markets, download the full version of the 2016 Office Market Outlook report here.

2016 Office Market Outlook

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Denver, CO | 2016 Top #CRE Markets to Watch: Multifamily

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Multifamily Markets to Watch. Not the largest or the most actively contested markets, the 2016 Multifamily Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Multifamily Market to Watch: Denver, CO

Denver - top multifamily market to watchThe Denver multifamily market has experienced significant additions of new supply as its population has grown 10.6% from 2010 to 2014, according to the Census Bureau. Further, the employment market is outstanding with 3.0% unemployment as of January ‘16 and annualized job growth of 2.5%, according to the Bureau of Labor Statistics. Denver features a larger renter population with approximately 50% of its metro’s housing units used for rental purposes; still rental rates are relatively affordable for a metro of its size, giving it room to grow. Top sectors for employment growth include Leisure and Hospitality, Financial Activities, Manufacturing, and Professional and Business Services growing at annualized rates of 6.0%, 3.9%, 3.5%, and 3.2%, respectively. As such, rent growth could hit 7% in 2016.

Advisor Insights: SVN | Denver Commercial

SVN’s Advisors at SVN | Denver Commercial have some multifamily market highlights to share. Here’s what to look out for in Denver’s multifamily market in 2016:

  • As population grows, (over 100,000 additional people since 2014), demand grows likewise for multifamily.
  • Household formation is growing with a younger demographic makeup in Denver. The CBD area alone now is housing a population of 90,000 residents, mostly in multifamily buildings.
  • Rents have risen significantly over the past few years but are now reaching affordability limits.
  • Renters are demanding fully amenitized properties when higher rents are asked by landlords.
  • Expect to see more micro-apartments to address affordability issues, especially in the CBD area.
  • Vacancy rates are now approaching more “normalized” conditions of 5-7%, versus virtually nil in the last couple years. This is due to increased delivery of new apartment units to the region, somewhat outpacing demand.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top multifamily markets, download the full version of the 2016 Multifamily Market Outlook report here.

2016 Multifamily Market Outlook

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Charlotte, NC | 2016 Top #CRE Markets to Watch: Retail

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2016 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Retail Market to Watch: Charlotte, NC

Charlotte - top retail market to watchCharlotte has expanded its employment base steadily since the recession bottomed in 2010 and currently has a relatively low 5.3% unemployment rate, as of January ‘16, and 2.8% annualized growth of new jobs, according to the Bureau of Labor Statistics. The region has also grown population by 10.1% from 2010 to 2014 according to the Census Bureau, making it prime for expansion and development of retail real estate. Major growing employment segments include Mining, Logging, and Construction, Financial Activities, and Leisure and Hospitality with 6.4%, 4.8%, and 4.6% annualized growth, respectively. As Charlotte continues to be a popular place to work and live, more firms are likely to enter the market, including those seeking to establish corporate headquarters. Despite these positive forces, North Carolina’s recently enacted “bathroom law” threatens to reverse economic growth as businesses and consumers look elsewhere to avoid the perceived discriminatory law; this could cause pain to the retail sector for the rest of 2016 and beyond if not fixed.

Advisor Insights: SVN | Percival Partners in Charlotte, NC

SVN’s Charlotte-based Advisors at SVN | Percival Partners have some retail market highlights to share. Here’s what to look out for in Charlotte’s retail market in 2016:

  • Increasing property values
  • Ongoing new development of grocery anchored centers
  • New grocery stores entering the market
  • Target will start expanding again
  • Continue to see high demand for investment properties

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top retail markets, download the full version of the 2016 Retail Market Outlook report here.

2016 Retail Market Outlook

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Atlanta, GA | 2016 Top #CRE Markets to Watch: Office

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Office Markets to Watch. Not the largest or the most actively contested markets, the 2016 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Office Market to Watch: Atlanta, GA

Screen Shot 2016-07-26 at 4.09.42 PMAtlanta has experienced strong gains in total employment and is setting record highs as of January ‘16, according to the Bureau of Labor Statistics, with unemployment at 5.2% and new job creation at an annualized rate of 3.5%. This includes growth in key office-using sectors including Professional and Business Services, Financial Activities, and Education and Health Services, which grew at annualized rates 5.0%, 2.0%, and 1.8%, respectively. In addition, Construction employment is growing at a 7.4% annualized rate, indicating further overall economic growth is projected to occur in Atlanta in 2016 and beyond. According to Georgia Trend, many high impact industries are likely to accelerate growth in Atlanta including life sciences and technology. These forces should cause rising rental rates and falling vacancies in the metro region, with downtown/midtown potentially poised to gain in the overall trend of urbanization affecting cities such as Atlanta.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top office markets, download the full version of the 2016 Office Market Outlook report here.

2016 Office Market Outlook

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Austin, TX | 2016 Top #CRE Markets to Watch: Retail

SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2016 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Retail Market to Watch: Austin, TX

Austin - top retail market to watchRetail real estate should perform well in Austin in 2016 and beyond, as this dynamic economy continues to grow and diversify. According to the Census Bureau, the population of Austin has grown 12.5% from 2010 to 2014. Not surprisingly, the economy looks stellar with a 3.2% unemployment rate as of January ‘16 and jobs are growing at 4.7% annually, according to the Bureau of Labor Statistics. The best sectors for job growth are Mining, Logging, and Construction and Leisure and Hospitality, growing at 11.0% and 9.2% annualized rates, respectively. These forces will keep new residents locating in the metro region and businesses expanding. Retail demand will follow the population and should continue expanding in 2016 with ever-increasing fundamentals.

Advisor Insights: SVN | Tamarack in Austin, TX

SVN’s Austin-based Advisors at SVN | Tamarack have some retail market highlights to share:

Gateway Cities like Austin continue to benefit from diverse job creation ranging from service jobs to higher-end STEM (science, technology, engineering and math). It remains an attractive place to live for all generations. Due to the continued numbers of people moving to Austin all property types are attractive but retail properties will continue to be the most favorable investment type.

Austin has a tight market for space so we will see most new construction in sub-markets of Austin such as Lakeway, Leander and Cedar Park.

  • With average rental rates averaging $20 – $23.50 per square foot, rates are expected to increase by more than 4% by the end of 2016.
  • Values in the retail market are expected to increase by 2% – 3.9% by year end.
  • Absorption has been positive for the previous five years and is expected to increase to an estimated 350,000 square feet within 2016. With slightly more than 300,000 square feet of retail space expected to be constructed by the end of 2016 the occupancy rate will also increase above its current 94% rate. Retail properties that are under construction, planned and proposed represent a 3% growth to the current Austin market.
  • Cap rates are currently 6.8% – 7% and are expected to stay relatively flat for the next 6 months.

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

To read more on other top retail markets, download the full version of the 2016 Retail Market Outlook report here.

2016 Retail Market Outlook

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SVN Releases 2016 CRE Market Outlook Reports

New Updates on Trends in Top Markets

This week SVN released the 2016 Market Outlook Reports as a way to update the CRE industry on current trends. Teaming up with the Lakemont Group, Real Capital Analytics, and REIS, SVN put together reports detailing today’s economic conditions and how they impact commercial real estate. These reports also highlight top markets to watch across the U.S., citing cities such as Chicago and Atlanta that CRE professionals should keep an eye on. Broken up into four major asset classes – industrial, multifamily, office, and retail – these reports provide useful insights as we head into the second half of 2016.

Highlights from Each Report Include:

Industrial

Chicago Market Outlook Reports
Chicago, IL
  • Global pressures weigh on growth
  • Net absorption strong as vacancy falls
  • Fundamentals improve for all industrial sectors
  • Demand growth persists
  • Yield seeking investors discover industrial properties
  • Warehouse is the storefront of tomorrow

Multifamily

  • New supply meeting demand
  • Rent growth fuels supply expansion
  • Class ‘A’ leads in rent growth, ‘B/C’ in occupancy
  • Record households and jobs increase demand growth
  • Low cap rates engender price risk fears
  • Baby Boomers may form next rental wave
Atlanta Market Outlook Reports
Atlanta, GA

Office

  • Slow growth and steady gains
  • Record rents amidst still high vacancies
  • ‘B/C’ holds steady while ‘A’ gains
  • Domestic strength and global uncertainty
  • Wide spreads indicate low risk
  • Return of the private office is possible

Retail

  • Discovering a new normal
  • High vacancies restrict the need for new supply
  • Neighborhood centers make gains on power centers
  • Consumer segment continues to grow
  • Opportunities for mispriced assets exist
  • Housing reconstruction to spur retail demand

Stay Updated…

Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.

 

CRE Market Outlook

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