Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/536709
7 July | August | 2015 CCIM.com Briefl y Noted Hospitality — Canada saw nearly $1.2 billion in hotel assets trade last year, with 15 percent bought by foreign investors, according to HotelNewsNow.com. Full-service hotels commanded 52 percent of the total volume, while select service made up 27 percent of the trades. Select service price per key rose 11 percent YOY to $101,800, the highest increase in all Canadian hotel segments. Industrial — Unlike other property sectors, industrial laughed in the face of 1Q15's severe weather challenge, posting a 38.8 msf absorption rate, a 20.5 percent YOY increase, according to DTZ. What's more, asking rents posted a 4 percent YOY increase — the fastest in this cycle — with seven markets seeing double digit rent growth and 12 others averaging 6 percent or better. Offi ce — The period 2015 to 2017 should be "the strongest three years of economic growth in the U.S. since 2004-06," reports Cushman & Wakefi eld. Offi ce absorption over the next three years is expected to total 175 msf, more than the past eight years combined. Average asking rent growth should post just under 5 percent in 2015 and 2016 and 3.6 percent in 2017, above the 10-year average of 2.8 percent. Multifamily — Luxury rules the day: 82 percent of the multifamily units built in 54 metros between 2012 and 2014 command rents in the top 20 percent of the market, according to CoStar. What's more, the price premium on new units is 21 percent higher than existing stock; a decade ago that fi gure was 9 percent, according to MPF Research. Meanwhile the median rent paid by millennials is $925, reports the Urban Land Institute. Retail — Cap rates for bank ground leases boasted a 205-basis point premium over other retail net leases in 1Q15, according to the Boulder Group. The average bank ground lease cap rate is 4.35 percent compared with the general retail net lease sector cap rate of 6.40 percent. Ninety percent of bank ground lease tenants are investment grade companies, increasing their popularity with investors. Jay Parsons/Getty Images Tenant Star Legislation Passed In April President Obama signed into law the Energy Efficiency Improvement Act of 2015, which establishes the voluntary Tenant Star program. Based on the Energy Star program, Tenant Star provides certif cation and recognition for tenants and landlords of leased com- mercial spaces that achieve energy ef ciency through common-sense measures in the design and construction of their buildings. It's esti- mated that the Tenant Star program will cut utility bills for landlords and tenants by an estimated $2 billion by 2030. Widespread Recovery: Top 5 Suburban Offi ce Markets Based on vacancy declines, 2014–17 1. Orlando, Fla. 2. Phoenix 3. Fairfi eld County, Conn. 4. Portland, Ore. 5. Sacramento, Calif. Source: Cushman & Wakefi eld 2015 Commercial Member Profi le Median annual amounts, based on 2014 f gures Income: $126,900 ↑ 32% Sales transactions: 11 ↑ 38% Transaction volume: $2.9 million ↑ 14% Leasing transaction volume: $500,000 ↑ 15% Source: National Association of Realtors