Each Wednesday, The Wrap presents a compilation of recent noteworthy commercial real estate stories from a variety of publications. Here are five stories that caught our eyes in recent days:
• “Office Market Nears Rent Growth Tipping Point” – by Randyl Drummer of CoStar.com. After years of sluggish performances, U.S. office markets could finally be on the verge of real rent growth over the next few years. This according to CoStar’s “First-Quarter 2012 Office Review and Outlook.”
A lack of new supply in recent years and an improving job market are two of the primary reasons for CoStar’s forecast. While recent job numbers have left some unimpressed, there have been increases in both the number of temporary jobs converted to permanent full-time positions and the number of hours employees work, both of which bode well for future office demand and rent growth, Drummer writes.
"We’ve seen steep increases [in leasing activity] from the bottom of the market in 2009," says Jay Spivey, CoStar senior director of research and analytics, in the article. "These leasing levels rival what we saw in the 2000 dot-com period."
• “Continued Signs of Progress at the Start of 2012” – Cassidy Turley report on Atlanta office market. On the local front, the Atlanta office market is continuing to improve, a new Cassidy Turley report shows. The market experienced 305,000 square feet in net absorption during the first quarter, driving down its vacancy rate to 21 percent, its lowest level since 2009.
Atlanta’s unemployment rate has continued to drop since the first quarter of last year; in fact, the area experienced job growth of 3.1 percent in 2011, the second-highest rate in the nation during that time. Office jobs made up half of the growth. Given these strengths, Atlanta will see increased sales activity throughout 2012, concentrated in Class A properties as well as distressed assets, Cassidy Turley forecasts.
• “A Coming Deluge of Apartment Construction” – by Victor Calanog of Reis for National Real Estate Investor.
Apartment vacancy rates are the lowest they’ve been over the past decade, and that’s fueling developers’ desire to build more units. The national vacancy rate dropped to 4.9 percent in first-quarter 2012, and effective rents grew by 0.9 percent, the biggest three-month increase in almost five years, according to Calanog.
While an increase in supply could reverse the positive trends of recent years, that may not necessarily happen, Calanog says. “Increased supply growth is a necessary but not sufficient condition for a severe pullback in apartment fundamentals,” he writes. “If demand for rentals remains high or rises even further, improvements in occupancies and rent growth can be sustained.”
• “Fed: Demand Up for Business, Commercial Real Estate Loans” – by Kent Hoover of BizJournals.com. New banking surveys bring additional good news for the commercial real estate industry. According to a quarterly Federal Reserve survey, banks are seeing increased demand for business and commercial real estate loans. In relation, they’re seeing “more aggressive competition” from other lenders, and some are even easing terms for business and commercial real estate loans, Hoover reports.
Another survey by Gallup for Wells Fargo found that only 30 percent of small business owners found it difficult to get credit in the past 12 months, down three percentage points from January.
• VIDEO: “Senior Housing Markets Solid” from GlobeSt.com. In the clip below, Sharon Yester, chief asset management officer for CNL Financial Group, discusses the healthy seniors housing market. Topics include the impact of demographics – 10,000 people per day are turning 65, Yester notes – and the likely future activity of healthcare REITs.