Commercial Investment Real Estate

JUL-AUG 2017

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.

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COMMERCIAL INVESTMENT REAL ESTATE 6 July | August 2017 MARKET T R E N D S 2016 Net-Lease Volume Breakdown by Property Type Where Transitional Lending Fits into CRE Lending Market* Grocers Beware: Disruption Is on the Horizon Millennials Moving the Needle on Retail "Shoppers in the coming years will think nothing of using voice-activated devices like Amazon's Echo to restock their kitch- ens. They'll habitually cook meals with ingredients delivered by the likes of Blue Apron, or drive to kiosks outside of their neighborhood store to pick up groceries after work. We're already seeing this kind of channel fragmentation and disintermediation across the indus- try, and it will only accelerate." —Joe McKeska, president of Elkhorn Real Estate Partners HIGHER RISK LOWER L+100–250BPS L+350–550BPS 8–12% YIELD 15–20% YIELD TRADITIONAL TRANSITIONAL MEZZANINE EQUITY LIKE Source: Real Capital Analytics, Q1 2017 * Ranges are unleveraged estimates based on Q4 2016 markets. L+ indicates LIBOR+. Source: Amherst Capital Management Source: Cushman & Wakefi eld • Millennials make 54% of their pur- chases online, up from 51% in 2015 and 5% higher than online purchases by other generations. • Millennials don't view the world through channels. Smartphones, tab- lets, social media, stores, and every- thing else are all one big ecosystem. • To survive, retailers must integrate their thinking, systems, and ways of doing business. • Digital natives are either a force to contend with — or to succeed with. Net-Lease Retail Volume: 27% Net-Lease Industrial Volume: 33% Net-Lease Office Volume: 40% m-imagephotography/Thinkstock

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