Commercial Investment Real Estate
6
May | June | 2014
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TREND S
MARK E T
a
According to Cassidy Turley's Spring Retail Report, national credit tenants rule the roost
today and their rule is class A shopping centers or nothing at all. Class B centers should
be upgrading to compete with class A, but even that is not a sure thing. "Increasingly,
[national credit] tenants are willing to hold out until either new product becomes avail-
able, or they are going to other markets where they can f nd the class A space they need,
rather than staying put in one geographic area," the report says. "As for class C product,
there will continue to be only minimal relief as far as occupancy growth goes and cer-
tainly nothing in the way of overall rental rate growth."
The Great Retail
Class Divide
10.0%
Neighborhood
centers
6.2%
Power centers
4.5%
Malls
7.4%
Specialty centers
8.6%
All shopping
centers
Source: Cassidy Turley
Shopping
Center
Vacancy,
4Q13
"During the fourth quarter [2013], commercial
and multifamily mortgage debt outstanding
reached a new high, erasing the declines caused
by the recession."
— Jamie Woodwell, vice president of commercial real estate research, Mortgage Bankers Association
Offi ce Sector to
Rebound in 2014
"Of ce Sector Primed for Dynamic Performance
in 2014," is a headline from Marcus & Millichap's
National Of ce Report, which issues a strong fore-
cast, not only for the of ce market but the econ-
omy in general. A strengthening housing market
supporting robust retail sales and a forecast of
3 percent GDP growth have companies moving
of the sidelines to hire and expand their of ce
space. In turn, investors are looking for higher
risk deals in smaller markets and new develop-
ment opportunities in low-vacancy markets. Most
of the development action this year will happen
in 15 markets, each with more than 1 msf of new
construction scheduled to come online.
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