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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

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

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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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

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

Albuquerque, NM | 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: Albuquerque, NM

Albuquerque top industrial marketAlbuquerque’s overall economy has remained fairly stable with a slowly falling, above national average level of unemployment at 5.8% as of January ‘16, according to the Bureau of Labor Statistics. Key industrial sectors have been losing employees and thus may threaten to soften the industrial space market; these include Manufacturing and Trade, Transportation, and Utilities which are contracting at –2.5% and –0.9% annualized rates, respectively. As much of the economic and industrial base of Albuquerque centers on high tech, research, defense, and other manufacturing, the industrial sector should remain very stable on a relative basis. Given low levels of new supply, growth in fundamentals could also occur in 2016 as the market is not over-supplied.

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

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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

[bctt tweet=”SVN released the 2016 Market Reports as a way to update the #CRE industry on current trends. ” username=”svnic”]

US Commercial Real Estate Markets After BREXIT

Analysis for SVN CRE Colleagues and Clients

Last week the world woke up to the implausible, the United Kingdom voting to leave the European Union. Immediately global and domestic equity markets have been volatile with rapid downside moves while perceived “safe” assets such as gold and US Treasury bonds soared in price. REIT stocks, perhaps a leading indicator of the market reaction and a flight towards the tangibility of commercial real estate, have fallen less than the market averages in the days since the BREXIT. All of these reactions, and most that will occur in the coming weeks, are simply reactions to the uncertainty; as nothing has really happened yet. Here is what is known so far:

  1. The UK will suffer from the uncertainty in the short term and probably the long term, assuming Parliament moves forward with the voters’ wishes. Local and especially multinational firms are undoubtedly going to curtail plans for investments in the UK and may even scale back workforces – or at a minimum – rethink future hiring decisions. This alone can and probably will put the UK into a recession, the severity of which could be high if the uncertainty persists. The main unknown factor is how the European Union will react; if they seek to be punitive and harsh to serve as a warning to other countries considering defection, then this could be an ugly “divorce”. Since the UK did not adopt the Euro, this “divorce” is somewhat analogous to a couple separating who never joined finances – still chaotic but not as bad as it could be.
  2. The British Pound will remain low and the US Dollar high. The currency moves, mainly a flight to Dollars from Pounds and Euros, should persist for some time, with higher volatility of course. This will harm the UK the most, and the US will see some benefits in terms of lower fuel costs and prices of import goods. Conversely, US exports will be more expensive so trade flows could become more imbalanced. According to the Wall Street Journal, the UK only accounted for less than 5% of US export volume, so the direct effect should be minimal. Nevertheless, the commercial real estate sectors serving trade and manufacturing could see decreased demand in some instances.
  3. Interest rates in the US are likely to remain low. The “flight to safety” has made US Treasury bonds of all maturities very popular and thus yields are likely to stay low for some time. Further, it is far less likely that the Federal Reserve will move rates up or take other tightening measures this year. This has broad reaching benefits for the domestic real estate markets all around.

BREXIT May Benefit the US Commercial Real Estate Industry

While the jury is still out on the final impacts to the US economy and real estate markets, most noted economists believe that BREXIT will have relatively minimal impacts directly on the US macroeconomy. Further, the flood of capital will actually provide some benefits and firms may direct investment dollars and expansion plans to the US and away from the UK and Europe. To the downside, the strong dollar will hurt export trade and possibly tourism, which has been facing headwinds from overseas for several quarters already. The large multinational corporations with international revenue could see weaker revenue and profit forecasts in the coming years without question. Still, overall “Mainstreet USA” is not likely to see immediate direct effects. When watching the moves of the stock indices it is important to remember that those firms derive anywhere from 30% to 70% of their revenue from outside the country on average; thus a stock market “crash” does not necessarily mean a domestic calamity.

Commercial real estate in the US is most likely to benefit based on what seems probable at this time. Investors seeking yield and safety will find that our real estate assets are a relatively safe place to park capital. The tangibility and low volatility of commercial real estate – even in low cap rate markets – stands to attract investment into the US property markets. This likely flood of capital and lower interest rates could actually cause prices to increase in many markets, especially the major “24-hour” hubs that foreign investors historically prefer. While the long term is far less certain – and there is undeniable risk that the BREXIT could serve as catalyst for a global recession – US commercial real estate looks to be an attractive investment even in those scenarios.


Follow Kevin Maggiacomo on Twitter: @Maggiacomo.

[bctt tweet=”Commercial real estate in the US is most likely to benefit based on what seems probable at this time. #CRE” username=”svnic”]

The Year Ahead – 2012 by Kevin Maggiacomo

As we look forward to a new year, I am pleased to share my thoughts on the very memorable 12 months past, and to offer my outlook for the commercial real estate market in 2012. Before I do, I would be remiss if I did not thank the Sperry Van Ness clients, Advisors, staff, and fellow brokers for their contributions in driving us forward in spite of the unpredictable times. I know that I speak for all SVN Advisors and staff when I wish you a prosperous New Year.

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A Year of Fits and Starts for Commercial Real Estate

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During a year of extraordinary economic and political uncertainties, commercial real estate held its position as a crucial safe haven for investors in 2011. Investment into the sector reached a peak in the second quarter, supported by CMBS conduit originators and more active life company and bank lenders. Even as economic and employment trends fell short, leasing activity for well-positioned assets strengthened. During this period, investment into segments of the market that had lagged during 2010, including commercial properties in secondary and tertiary markets and value-add opportunities, showed signs of firming, as well.

5

In spite of the rising momentum, commercial real estate investors revealed they were not entirely immune to the obstacles facing the wider recovery in business confidence. As I suggested in my New Year’s message one year ago, this has been a period of fits and starts. Over the summer, renewed disruptions of capital and credit that were largely unrelated to the property sector threw the conduit into disarray and slowed the pace of transaction activity more broadly. For many borrowers, lending sources pulled back once again, with the result that a larger share of pending sales has struggled to reach closing.

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While sales volume in the third and fourth quarters will not match the spring’s flurry of trades, the shifts in the market must be understood in the context of a turbulent economic and political environment. Where investors have retrenched, it is often under the force of external pressures. It nonetheless remains clear from the current diversity of investors and lenders that commercial real estate is high on the investment hierarchy. In fact, many of the last twelve months’ most notable and most visible deals only came to fruition as the year drew to a close. The fundraising activities of the major REITs support this assessment, as well. US REITs raised $37.5 billion in equity in 2011, a new record that easily surpasses the previous high of $32.7 billion set in 1997. They raised another $13.8 billion in unsecured debt.

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5

A Persistent Imbalance

5

In the final tally, investment sales in 2011 will easily surpass the $120 billion benchmark set in 2010 and will roughly triple the record lows set in 2009. As a wider range of buyers and sellers have reengaged, pricing in the most actively traded markets has exhibited the sharpest improvements. In the extreme, some highly coveted trophy properties have prompted aggressive bidding by domestic and cross-border buyers and have ultimately sold at higher prices than during the market peak in 2006 and 2007.

5

While the most visible investments affirm institutional investors’ confidence in the sector, they offer only one perspective on the market. As I pointed out at this time last year, the headline statistics do not fully convey the unevenness of the recovery or the diversity of its investors. The market for assets that do not dominate their respective cities’ skylines is necessarily recovering along its own trajectory. In the current market, that has meant a balance of tailwinds and headwinds that has weighed in favor of the latter.

5

Core investors whose scope may be limited to a subset of metropolitan areas have argued that rising prices and falling cap rates will inevitably spill over into other segments of the market. In one respect, this is correct. Yields on mid-cap investments are higher than for any trophy property. But that assessment also overlooks the uniqueness of the market for small- and mid-cap commercial properties and the very different makeup of the investor and lender base. Understanding these differences is crucial to assessments of what the next year will hold for commercial real estate.

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The Economy, Jobs, and the Political Deadlock

5

As in previous cycles, the recovery in small- and mid-cap property investment is proving more sensitive to underlying drivers of cash flow than the market for the largest properties. This inevitably means that a strong economic recovery will be one of the requisites for more robust investment. While companies have seen their profits rebound, surpassing their previous peaks from 2007, an environment of extraordinary economic and political uncertainty has constrained decision-making and investment in new tools and people.

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In the first days of 2012, the employment outlook looks brighter. For commercial real estate – and for millions of families across the country that have struggled with unemployment – this is the critical missing link to a more balanced recovery. Although the data on job creation in 2011 only shows a modest improvement over the prior year, leading indicators of firm hiring have turned more positive. Job openings have been trending up consistently over the last year. More recently, first-time applications for unemployment insurance have fallen back to their lowest levels since early 2009. Further, employment gains in temporary help services have picked-up over the past 5 months, which lends well to permanent job creation. Even though single-family housing shows no definitive signs of an inflexion, other metrics indicate that marginally stronger growth in 2012 will support a healthier pace of private sector job creation.

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Regrettably, an environment of political dysfunction qualifies the outlook, both at home and in Europe. In fact, the latter presents one of the most credible threats to global growth. In the United States, the uncertainties presented by unusually intrusive policymaking may resolve over the next year, given the need for all parties to clarify their political positions and objectives as Election Day approaches. Needless to say, a business environment where the rules of the game are more predictable is more conducive to growth and job creation.

5

Investment Sales and Financing

5

As much as it depends on a stronger economic trajectory, the outlook for small- and mid-cap investment also relies on buyers’ access to financing. In financing their investments, large REITs may offer shares or issue unsecured bonds; trophy investments have also been supported by favorable lending terms from life companies and large international banks. These scenarios are not reflective of the market for smaller assets where the sources of risk and its mitigating factors can be very different. Given the historically dominant role of regional banks and CMBS lenders in facilitating this segment of the market, these lenders figure prominently in the assessment of what the next year will hold.

5

Although the CMBS market has struggled to reassert itself since last summer’s interruption, plans for new issuance in the first quarter of 2012 indicate a gradual increase in conduit origination activity. Surprising as it may seem, stability in global bond markets is an important condition for well-functioning CMBS markets, since the spreads on the latter’s bond yields are influenced by corporate bond market trends, as well. In the first half of 2011, more than half the CMBS loans securitized had origination balances of less the $10 million. It remains the case that a more active CMBS market is required for the small and mid-cap segments to flourish, in particular, as a large number of seasoned CMBS loans mature over the coming year.

5

Outside of the apartment sector, where generally improving fundamentals and the contributions of Fannie Mae and Freddie Mac are facilitating both sales and new development, commercial property investors are dependent on bank financing given an absence of other debt sources. For the last several years, that has presented a problem. Banks have been preoccupied with the management of their distress portfolios and have hesitated to extend new credit, even in the best of cases. The most recent data show those priorities changing. Banks’ default rates on their commercial and apartment loans have fallen consistently over the last year. Coinciding with the stronger performance of the legacy balance sheets, many banks are accelerating the liquidation of bad loans and real estate-owned. A growing minority are lending again, increasing their exposure in segments of the market where an absence of competition and low interest rates are affording opportunities to extend credit. Improvements in bank lending and CMBS issuance will have a disproportionately positive impact on the mid-cap market. Access to historically low-cost credit in 2012 and the likelihood of higher interest rates in 2013 signal an unmatched window of opportunity for acquisitions over the next 12 months.

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Conclusions

5

The economic and jobs outlook is improving. With so many of the underpinnings of a stronger recovery in place, we can afford a degree of optimism. Politics and the possibility of external shocks, primarily from Europe, still qualify that optimism.

5

While prices in the largest markets have recaptured a significant share of their lost value, other assets have lagged the headline measures. Combined with historically low borrowing costs, there is tremendous upside potential for borrowers with access to financing who can identify well-positioned assets.

5

While the process has been frustratingly slow, more banks are moving distress off their balance sheets. This process has the potential to accelerate in 2012, given banks’ stronger positions generally, an evolving regulatory environment, and the potential for distress from maturing CMBS. That will create some pressures on the market, but it should also deepen the pool of distressed assets and notes for sale.

5

Attention will necessarily turn to the small and mid-cap market as the economy improves and financing options broaden. Given our experience in this arena, we are anticipating a high volume of advisory work to identify and market investment opportunities before consensus firms. Timing will be the crucial differentiator in this market – the intersection of low-cost financing and first-mover advantage demands that we act deliberately.

Kevin Maggiacomo, CEO & President, Sperry Van Ness International Corporation

 

*All Sperry Van Ness® offices are independently owned and operated.