Commercial Investment Real Estate

SEP-OCT 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.

Issue link: http://cire.epubxp.com/i/870737

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COMMERCIAL INVESTMENT REAL ESTATE 6 September | October 2017 MARKET T R E N D S 2017 Self-Storage Continues Sunny Forecast Senior Housing Equilibrium Projects Shortage by 2026 "We have been spoiled for so long by low interest rates in commercial real estate. Currently, we have to reset expectations for target returns, but there's still lots of capital out there, both domestic and abroad, that appreciates the value and sta- bility of U.S. commercial real estate. It remains to be seen, but concerns over volatility in the public REIT market may turn out to be more perception than reality." — Elizabeth Braman, CCIM, Senior Managing Director at Realty Mogul Source: Marcus & Millichap Source: National Investment Center for Seniors Housing and Care, U.S. Census Bureau, Q1 2017, from CBRE Research Supply (units, M) Supply Trend (L) Equilibrium (L) 80+ Population (M) Supply Shortage Forecast 80+ Population (R) 3.0 2.5 2.0 1.5 1.0 0.5 35 28 21 14 7 0 2014 2016 2018 2020 2022 2024 2026 2028 2030 2034 2036 2038 2040 2042 2046 2044 2032 0 basis points change in vacancy Vacancy: Nationwide self-storage vacancy remains at a historic low of 10.2 percent during 2017, due to continued household growth and rising incomes. 2.7% increase in climate-controlled rents Climate-Controlled Rents: Healthy underlying demand for storage space continues to boost cost for rentals. The average rental rate for climate-controlled space will rise 2.7 percent to $1.63 psf, building on a 1.6 percent increase in 2016. 3% increase in nonclimate-controlled rents Nonclimate-Controlled Rents: Tight market conditions are driving another year of steady rent growth in 2017. The average asking rent is expected to climb 3 percent for nonclimate-controlled units to $1.31 psf. = + + George Doyle/Getty Images

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