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/92705
MARKETTRENDS Hotel Pipeline Improving as of 2Q12 Projects/ Change from rooms Hotels under construction 525/66,917 2014 new hotel openings 446/48,335 Source: Lodging Econometrics up 36% up 31% 2011 (market bottom) Briefl y Noted Hospitality — Hotel transactions totaled about $8 billion in August and should close out 2012 in the $12 billion to $14 billion range, down from 2011's $20 billion volume, according to STR Analytics, which attributes the decline to fewer REIT deals. However, hotel investors are feeling more comfort- able, says STR director Steve Hennis: "They don't see as much risk as in 2009." The Long View: CCIMs Rate Investments On a scale of 1 to 10 Investment Commercial real estate Stocks Bonds Cash 2Q12 6.1 4.8 4.0 4.7 2Q11 5.8 4.8 4.2 5.0 "CCIM members continue to look for apartment properties, medical offi ce buildings, and land and agricultural properties. … One respondent stated, 'Real estate is the only game to play in this economy.'" Source: 3Q12 Investment Trends Quarterly 8 November | December | 2012 Industrial — Demand for class A industrial space continues to drive lease rates up in some markets as well as fuel new construction, mostly at the expense of older buildings, CBRE reports. New construction totaled 11.2 msf in 2Q12, with pockets of spec building occurring in Northern Virginia, Indianapolis, Inland Empire and Orange County, Calif., Salt Lake City, and Atlanta. Multifamily — Apartment demand "will continue to outstrip supply for the next couple of years at least," says Mark Obrinsky, chief economist of the National Multi-Housing Conference. "We're still 100,000 starts a year away from meeting demand — or maybe more." The situation is not helped by tight fi nancing: NMHC's quarterly survey indicates that acquisition and construction financing are restricted to top-tier markets. Offi ce — CBRE economist Arthur Jones recom- mends Houston and Pittsburgh as strong targets for non-core market offi ce acquisitions. The reason? Both cities have recovered in terms of employment and effective rent for secondary markets. "For inves- tors looking to clear an IRR hurdle on the order of 8 percent, these are among the markets that can provide that sort of return," he says. Retail — The number of retail chief financial offi cers forecasting a continued economic turnaround nearly tripled this year when compared to 2011, according to a BDO retail survey of CFOs: 32 percent see better days ahead, compared with 11 per- cent last year. In addition, CFOs forecast a 4.5 percent increase in total retail sales for 2012. Commercial Investment Real Estate Corbis Photography/Veer