Each Wednesday, The Wrap presents a compilation of recent noteworthy commercial real estate stories from a variety of publications. Below are links to five stories that caught our eyes in recent days.
- Six Trends in Commercial Real Estate to Watch for in 2015 by Peter Burley and David Lynn for Urban Land.
“A confluence of factors including, especially, the economic recession and the inexorable wave of e-commerce has redefined the retail market equation. The day of the suburban mall, anchored by a mid-market department store, has probably passed. There will be no return. And, although the industry’s evolution continues, we are already beginning to see a deeply bifurcated mix of high-end urban retail destinations at one end of the retail spectrum with discounters at the other, and a scattering of local grocery-anchored strips in between.”
- Economy Watch: Office Vacancies, Energy Prices by Dees Stribling of Commercial Property Executive.
“The tightest office market in the country is Washington D.C., with a vacancy rate of 9.2 percent, noted Reis. New York was second tightest, coming in at 9.5 percent. Driving the vacancy declines in most markets is net office space absorption, which was up 28 percent in 2014 compared with the previous year, to 32.5 million square feet. That was the largest total for that metric since before the onset of the recession.”
- Quick Study: REITs Post Above-Average Historical Returns in 2014 by Sarah Borchersen-Keto of REIT.com.
“ [Brad] Case also highlighted a key difference between the real estate market cycle and the stock market cycle. The stock market cycle tends to last just a few years, he noted, whereas the real estate cycle can run for an average of 17 to 18 years. Returns during the last cycle averaged more than 14 percent per year.
The current real estate cycle has lasted less than 8 years, Case observed.”
- Looking at the Year Ahead in Retail Real Estate by Anjee Solanki for Shopping Center Business.
“Retailers have their eyes on the 83 million millennials—those born between 1982 and 2000. This generation, which is larger than the baby boomers, is expected to spend more than $200 billion annually starting in 2017, leaving retailers with the tall task of developing a whole new consumer model that previously had been based on appealing to boomers.”
- Report: Industry Shielded from Rising Rates by Real Estate Weekly.
“According to the survey of Commercial Real Estate Finance Council members released on Monday, members expect loan volumes in 2015 to top those in 2014 as loan maturities rise and property fundamentals improve.
Survey respondents expect the U.S. commercial real estate finance market in 2015 to be quite healthy, buoyed by strong investor demand, rising loan maturities, relatively low levels of new construction and improving property fundamentals.”