CCIM
CONNECTIONS
Market
Analyst
As the inventory of quality assets in top-tier markets began to shrink this year, investors turned
their attention to secondary and tertiary markets. "Tis robust interest marked a turning point for
commercial real estate," says George Ratiu, director of quantitative and commercial research for the
National Association of Realtors. Markets such as Seattle, Austin, Texas, and Jacksonville, Fla., continue
to lure hungry investors.
"Tese smaller markets ofer higher yields, and in the case of technology, energy, or intermodal
transportation centers, signifcant upside potential," Ratiu says. "As the diversifcation and availability
of capital sources continue into 2014, midsize and smaller markets are well positioned to ride the rising
tide of commercial transactions."
Ratiu has seen a wide range of economic and commercial real estate activity during his career. With
experience analyzing Eastern European countries' integration into the European Union and its efects
on commercial properties, Ratiu brings a global perspective to his role at NAR. "In Washington, D.C.,
I've had a front-row seat for the 2008 fnancial crisis, the ensuing global recession, and the arduous
economic and commercial real estate market recovery," he says.
As 2014 gets underway, Ratiu expects employment to remain the No. 1
concern for commercial real estate's continued growth. "A large portion of the
population remains under or unemployed," he says. "Add stagnant or declining
real wages, and we can see why vacancies for ofce and retail properties remain
at double digits."
On the upside, a strengthening housing market and gains in the fnancial
markets have boosted consumers' "wealth efect," Ratiu notes. Increased
consumer spending, reduced consumer debt, and widening credit availability
are contributing factors that translate into positive news for commercial
real estate. "With interest rates expected to remain relatively stable next
year, commercial markets should experience improved fundamentals and
continuing investment opportunities," he says.
Read more from George Ratiu, director of quantitative and commercial research for the
National Association of Realtors, in CCIM Institute's Quarterly Market Trends report at
www.ccim.com/resources/qmt.
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November | December | 2013
Commercial Investment Real Estate