Report: Top 10 CRE Markets to Watch in 2017

Written on October 31, 2016 at 04:37 PM

The Urban Land Institute and PwC recently released Emerging Trends in Real Estate 2017, an in-depth outlook report that reflects the views of more than 2,000 professionals in real estate development and investment who completed surveys, conducted interviews, or participated in focus groups as part of the research process. The reports includes a "Markets to Watch" section, that takes an expanded look at all 78 markets included in this year’s survey. 

Survey respondents shuffled the markets a little for 2017. Austin, which has been a fixture in the top ten for the past few years, is getting its turn at the top. Austin's market has benefited from a diverse economy that was affected in a minimal way by the global financial crisis, a growing population base made up of an educated labor force, and the undeniable “hip” factor that makes Austin attractive to the millennial dominated workforce.

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Categories: South Carolina, Washington, Real Property, North Carolina, Tennessee, Texas, California, Oregon

Houston Commercial Property Trade Group Supports Property Tax Recapture Measure

Written on October 27, 2016 at 12:45 PM

The local chapter of the Building Owners & Managers Association voiced their support of  recapture measure this week because without it, the group fears it could saddle some of Houston’s premier commercial properties with higher tax bills and make them less competitive. At issue is the state's decision to reclassify the Houston Independent School District as "wealthy." Because of that, funding laws require the district to pay an estimated $162 million next year to the state for redistribution to poorer school districts. In previous years, HISD received additional money from the state through the plan.

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Categories: Real Property, Texas

More Restrictions Planned for Louisiana's Property Tax Break Program for Manufacturers

Written on October 26, 2016 at 04:58 PM

Last month, the Louisiana Board of Commerce and Industry deferred action on more than two dozen requests for the Industrial Tax Exemption Program, which would equal about $15 million in property tax breaks. The decision came after Gov. John Bel Edwards said he wants to change Louisiana’s approach to the tax exemption program created decades ago, and issued an executive order in June spelling out that he intends to tie the tax breaks to job creation and retention and to involve local government agencies in the decisions. Edwards recently announced he is further tightening the rules for the tax exemption program. 

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Categories: Real Property, Industrial & Manufacturing, Louisiana

U.S. Industrial Market to Maintain Record Pace into 2018

Written on October 25, 2016 at 04:05 PM

The U.S. industrial market is on track for another record year in 2016, and the market could expand well into 2018 despite the possibility of higher interest rates that would increase the costs of carrying inventory, according to global commercial real estate firm JLL. Demand will be powered by the dramatic growth of e-commerce and the fulfillment networks developed and expanded to support it. While e-commerce accounts for only 8 percent of all U.S. retail sales, according to JLL estimates, that figure will undoubtedly rise as traditional retailers begin shifting massive resources that were once reserved for brick-and-mortar investments to the digital world.

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Categories: Industrial, Real Property, Warehouse

U.S. Mall Investors Set to Lose Billions as Retail Gloom Deepens

Written on October 21, 2016 at 10:08 AM

U.S. department stores have been struggling for several years now as online shopping popularity continues to grow – but now it’s the investors who are paying the price for the dramatic shift in shopping preference. According to Reuters, weak September core retail sales, which strip out auto and gasoline sales, provide a window into the pain the holders of mall debt face in coming months as retailers with a physical presence keep discounting to stave off lagging sales. Some $128 billion of commercial real estate loans - more than one-quarter of which went to finance malls a decade ago - are due to refinance between now and the end of 2017, according to Morningstar Credit Ratings. Wells Fargo estimates that about $38 billion of these loans were taken out by retailers, bundled into commercial mortgage-backed securities (CMBS) and sold to institutional investors.

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Categories: Real Property, Retail, Malls

San Francisco is the Greenest U.S. Office Market

Written on October 19, 2016 at 04:41 PM

Institutional owners of office buildings continued to pursue green building certifications in the 30 largest U.S. markets during 2015. Continuing an upward trend over the past decade, green certifications are now held by 11.8 percent of all surveyed buildings, representing 40.2 percent of all office space. Both figures are slightly above last year’s results, according to the third annual Green Building Adoption Index study by CBRE Group, Inc. and Maastricht University. “Green” office buildings in the U.S. are defined as those that hold either an EPA ENERGY STAR label, USGBC LEED certification or both.

After placing second on the Green Building Adoption Index the two prior years, the San Francisco market claimed the top spot with 73.7 percent of its space qualified as green certified. Chicago claimed the second spot, narrowly trailing the leader at 72.3 percent and Minneapolis fell from the top into third spot at 60.6 percent. Houston, Atlanta and Los Angeles all also achieved more than 50 percent green certification in their office markets.

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Categories: Office, Minnesota, Georgia, Real Property, Illinois, Texas, Green Initiatives, California

U.S. Hotel Industry Bracing for Slowdown

Written on October 18, 2016 at 03:34 PM

The Baird/STR Hotel Stock Index fell 6.4% in September to close the month at 3,134. Year to date, the index remains up 1.3%.  "As we enter the final months of 2016, the U.S. hotel industry is bracing for a slowdown in demand growth and an acceleration in the number of open hotels," said Amanda Hite, STR's president and CEO. "STR expects nationwide occupancy to flatten or decline, as can already be seen in a number of Top 25 Markets.”

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Categories: Real Property, Hospitality, Hotels

Office Market Remains Strong, But Nearing Peak

Written on October 17, 2016 at 04:04 PM

A steady demand for space and limited new construction are supporting healthy fundamentals in the office sector, but a slow down or neutral growth is expected in most markets next year. Experts report that office occupancy and absorption rates both remained high in the third quarter, as job growth continued to improve and companies took more risks on new leases. “There was some concern and caution expressed by a lot of companies earlier in the year, but now we’re seeing tenants actively expanding, even going into new markets,” said Julia Georgules, vice president of research with JLL.  “It’s a testament to the stability of the economy.”

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Categories: Office, Real Property

Corporate Relocations Drive New Jersey Office Market to Hottest Quarter in Recent History

Written on October 04, 2016 at 11:41 AM

As several large corporations executed major relocations to upgrade their space and take advantage of state incentives, Northern and Central New Jersey enjoyed one of their best quarters for office leasing in recent history. New Jersey absorbed 1.8 million square feet of office space in Q3 of 2016, the highest amount of square footage absorbed in any one quarter in the state in the past fifteen years, according to Cushman and Wakefield. Nearly all of the occupancy gains were concentrated within the Class A product. The last two quarters combined have produced slightly more than 2.8 million square feet of net occupancy gains, as vacancy has fallen by 140 basis points since the first quarter.

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Categories: New Jersey, Office, Real Property, Leased

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