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/649656
8 March | April | 2016 T RE N D S M A RK E T U.S. Offi ce Snapshot, 4Q15 4Q14 4Q15 Vacancy 14.7 13.9 Net absorption 21.5 msf 21.3 msf Asking rents $26.96 $28.15 Source: Cushman & Wakefi eld Briefl y Noted Hospitality — Excluding mergers and acquisitions activity, last year saw 1,575 individual hotel and portfolio transactions in the U.S., up from 1,491 in 2014, reports Lodging Econometrics. Although 2015 marked an eight-year high, hotel sales were still 28 percent lower than 2007's peak at 2,178 transactions. Industrial — Industrial topped January's Ten-X Commercial Real Estate Nowcast. It showed the greatest increase in valuations — 215 bps — according to the pricing index, which combines Google Trends data, Ten-X's proprietary transaction database, and investor surveys to forecast commercial real estate pricing trends in real time. Altogether, commercial valuations in January increased 19 bps from December 2015, the slowest increase since early 2014 across the fi ve major commercial real estate sectors. Multifamily — The multifamily boom is not over, according to the Yardi Matrix report. Recent deals "indicate that the biggest and most sophisticated investors in commercial real estate are betting on the multifamily sector over the long term. Given that other capital sources traditionally mimic the activities of the Blackstones and Starwoods of the world, there is not likely to be a shortage of equity capital in the sector anytime soon," the report says. Cap rates on apartments dropped to 5.8 percent nationally and 3 to 4 percent in gateway markets in 4Q15. Offi ce — Offi ce is the most popular sector for investment in 2016 among both investors and fund managers responding the Pension Real Estate Association's 2016 Investment Intention Survey. While international investors continue to target the major markets, domestic U.S. investors are more geographically diverse in their choices, eschewing San Francisco and Washington, D.C., in favor of less-well-known markets. Retail — Off-price is where it's at in brick and mortar retailing, as TJX — the parent company of T.J. Maxx and Marshall's — has become the top clothing seller in the U.S. and possibly the world, according to The Economist. Investors love off-price retailers as well: As the Dow Jones U.S. Apparel Retailers Index fell by 6 percent during 2015, the shares of Ross and TJX rose by 15 percent and 4 percent respectively. Foreign Investment in U.S. 64% of foreign investors plan modest or major CRE investment increases 60% said U.S. was most stable and secure country for CRE 46% said U.S. of ered best capital appreciation Most Favored Property Types 1. Multifamily/Industrial (tie) 2. Retail 3. Of ce 4. Hotels Source: Association of Foreign Investors of Real Estate A Pretty Good Year 2015 CRE volume: $128.3 billion, up 26.2% YOY U.S. Composite Index (lower-value properties in secondary and tertiary markets): up 12.6% YOY Source: CoStar gbarm/Thinkstock; Joe Christensen/Thinkstock