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.
• Office Demand Exceeding New Supply by Max Taves of the Wall Street Journal.
“Last year, as U.S. employment grew by 3 million jobs, or 1.9 percent, the amount of space occupied by businesses grew by 52.7 million square feet. That was a 46.3 percent jump in so-called ‘absorption’ over 2013 and the highest level since 2007, the report said.
Meanwhile, only 22.3 million square feet of new office space was constructed last year, the report said. That amount is less than half the historical average and 65 percent of 2014’s new supply was concentrated in only five markets—Houston, New York, Dallas-Fort Worth, Washington, D.C. and San Francisco.”
• Real Estate Crowdfunding Seen Topping $2.5 Billion in ’15 by Nadja Brandt of Bloomberg.
“Property crowdfunding, in which large amounts of money are raised through small contributions, is probably going to climb from $1.01 billion last year and $396.4 million in 2013, Los Angeles-based Massolution said in a report released Tuesday. Individual fundraising campaigns ranged from less than $100,000 to more than $20 million last year, according to the crowdfunding research and advisory firm.”
• Economy Watch: Construction Spending = Better Times for Office, Hotel Markets by Dees Stribling of Commercial Property Executive.
“Among non-residential property types, office and hospitality properties are the clear winners when it comes to construction spending in January compared with last year. Office construction spending was up 14.9 percent, while lodging experienced a 17.8 percent increase. Both are very healthy metrics indeed, since (unlike apartment construction), those property types aren’t as volatile from month to month or even year to year. The office market is seeing a lot of build-to-suit construction as companies see it as a better way to obtain new space, but in the case of hotels the construction increase is spurred by demand, since the industry has fully recovered from its slump.”
• Low Vacancy, Limited Construction Boost Medical Office Building Sales by Robert Carr of National Real Estate Investor.
“[Elisa] Freeman notes there’s a fair amount of construction and transaction activity for rehabilitation and long-term acute care hospitals. Companies such as HealthSouth, Select Medical, Post-Acute Medical and Landmark Hospitals have been actively developing such hospitals, and investors such as CNL Healthcare and CV Mission Critical REIT [were] active acquirers of such hospitals in 2014.”
• Freddie Mac Predicts Strong 2015 by Lindsay Machak of Multifamily Executive.
“‘About 3.1 million non-farm jobs were added to the economy in 2014, the largest annual gain in 15 years,’ he says. ‘And the unemployment rate was 5.6 percent at the end of the year, close to the Federal Reserve’s definition of full employment. This low unemployment combined with low wage growth should lead to more household formations and increased housing demand this year.’”