NAI Capital Commercial’s Post

More trouble awaits the commercial real estate market next year. Commercial real estate property values will fall another 10% next year, after falling 11% this year, Capital Economics’ deputy chief property economist, Kiran Raichura, wrote in a recently released outlook for next year. The economic research firm defines the market size as more than $5 trillion, using a 2022 year-end estimate. That means the 11% decline in value this year equates to roughly $590 billion while the 10% fall expected next year equates to $480 billion. Read more: https://lnkd.in/g8BQ9yaB

The Green Street Commercial Property Price Index saw a modest 0.7% increase in May, reflecting stable real estate pricing trends for 2023. Although the index remains 21% below its March 2022 peak, the market appears to have adjusted to higher interest rates, with expectations for continued stability. Notably, while malls experienced the best monthly gains, the office sector faced the sharpest year-over-year decline at -14%. This nuanced performance across property types highlights the evolving dynamics within the commercial real estate market. Bio: https://lnkd.in/eB3g9bP3 Google Business Profile: https://lnkd.in/egn5jSck LinkedIn: https://shorturl.at/bmDMV Facebook: https://lnkd.in/eGTqGWuN Instagram: https://lnkd.in/eZMXQpjn TikTok: https://lnkd.in/ejfsyqfM #commercialrealestate #commercialproperty #CommercialLand #commerciallandforsale #warehousespace #officespace #flexspace #industrialspace #sandiegocommercialrealestate #sandiegorealestate #realestate #cre #realtor #realestateagent #realestateinvesting #property #commercial #commercialproperty #realestateinvestor #business #investment #propertymanagement #investmentproperty #residentialrealestate #forsale #retail #entrepreneur #construction #officespace #realestatebroker #EconomicInsights #InflationAnalysis #FedPolicy

Rejuvenate, Reinvent and Reimagine! With commercial property prices falling in the UK, buyers are capitalizing on the opportunity. Savills reports a 25% drop in market value since June 2022, citing reasons such as economic slowdown, higher interest rates, and increased remote work. Basil Walpole, director of central London investment at Savills, emphasizes the current potential for investors to pursue significant deals in London. The market has experienced 18 months of subdued deal flows and a quiet first quarter. Mark Stansfield from CoStar Group notes a 34% increase in available office space, with 33 million square feet now on the market. Asking prices have decreased by 18% since June 2023, indicating a possible boost in sales activity as interest rates decline. GREAT PORTLAND ESTATES P L C successfully raised £350 million for £1.4 billion in acquisitions, focusing on development sites and office conversions. CEO Toby Courtauld views the present climate as a strategic moment to invest amidst prevailing market pessimism. Listed UK commercial property firms are trading at a 24% discount to net asset value, reflecting investor hesitancy. However, logistics assets such as SEGRO plc and Big Yellow Self Storage continue to attract interest, drawing in North American investors like Blackstone and Brookfield Properties. Despite concerns about debt and potential Chinese sales affecting the market, cash-rich investors are expected to increase their acquisitions of undervalued British properties after the election. #Growth #CRE #RealEstate #Rightsizing #Investment #London #Business #Rejuvenate #Reinvent #Reimagine I The Business Times I SPH Media I Neil Behrmann

Embracing the winds of change, the global commercial real estate market stands at the threshold of unprecedented growth, with projections soaring beyond $260 billion within the next five years. This transformative journey is propelled by dynamic shifts in industry demands and evolving preferences, promising a landscape ripe with opportunities. In the United States alone, this market surge is estimated to bolster by $260.37 billion from 2022 to 2027, fostering a robust compound annual growth rate of 3.3%. Yet, amidst this upward trajectory, the essence of return on investment (ROI) remains a pivotal consideration, underscored by the diverse nature of property types. Indeed, ROI strategies vary significantly between multi-family homes, apartment buildings, and office spaces, each offering distinct avenues for financial success. In the midst of this growth spurt, it's imperative to recognize the relative underrepresentation of commercial real estate within the U.S. market. This low market share not only underscores the vast potential for expansion but also heralds a landscape ripe for competitive dynamics. Providers navigate these waters with a keen eye on pricing strategies and contractual terms, fostering an environment of aggressive leasing scenarios. As we stand on the cusp of this transformative journey, let us seize the opportunity to delve into the intricacies of this burgeoning market, navigating the currents of growth with prudence and foresight. #TopsideRealEstate #NewportBeach #CA #OrangeCounty #CREInvesting #CREMarket #CREBroker #TriviaThursday #CommercialRealEstate #MarketGrowth #ROIstrategies

Cincinnati's real estate market is showing strong performance and resilience in Q2 2024. Here are the highlights: Industrial Market: 🔹 Net absorption increased to 0.4M SF from 0.3M SF in Q1 2024. 🔹 Lease rates held steady at $6.41/SF. 🔹 Vacancy rates stable at 6.0%. 🔹 Despite a slowdown in new construction, the market remains resilient. Office Market: 🔸 Net absorption surged to 78.4K SF from -61.9K SF in Q1 2024. 🔸 Class A rents slightly dipped to $23.14/SF YTD, while overall market rents rose to $19.61/SF. 🔸 Vacancy rates decreased to 16.8%, down from 17.4% in Q1 2024. These reports underscore the adaptability and strength of Cincinnati's commercial real estate sector. Dive into the full reports for detailed insights and trends that can help you make informed decisions. Read the full reports here: https://ow.ly/7CJc50SyOtU #Cincinnati #IndustrialMarket #OfficeMarket #CommercialRealEstate #MarketReports #Q22024 #CRE #RealEstateTrends #NetAbsorption #LeaseRates #VacancyRates

Did you know that commercial real estate has a significant impact on residential real estate? In 2023, the development and operations of commercial buildings contributed a staggering $2.5 trillion to the U.S. GDP, generated $881.4 billion in personal earnings, and supported 15 million jobs nationwide. Interestingly, Texas ranks No. 1 for total contributions to state GDP across all major commercial real estate asset types, including office, warehouse, industrial, and retail. In fact, commercial real estate contributed $185 billion to Texas' gross domestic product and supported 1.2 million jobs in 2023 alone. As a homeowner or someone considering relocating for work, it's essential to understand how the commercial real estate market can influence your housing options and overall economic well-being. If you have any questions or need guidance navigating the complex world of real estate, feel free to reach out. I'm here to help you find the right resources and make informed decisions for your unique situation. https://lnkd.in/dFGKfH_h First Class Homes 425.269.7229

LOOKING AHEAD? Property prices are continuing to fall in Surrey, which is great news for potential buyers! Several forecasts suggest a continued downward trend before a potential recovery. Savills UK predicts that London house prices will be down 10% by July 2024; another 4% price drop! If you're looking to purchase a property across Surrey and the surrounding area, contact us to make sure your prospective property is a worthwhile investment. 📧 [email protected] 📞 020 8974 1535 #PropertySurveyor #PropertyValuation #CharteredSurveyor #RealEstate #SurreyBusiness #RICS #PropertySurvey #EPC #BuildingSurveyor #Property #Surrey

MF update focused on the wrong risk metric. The big picture is that 94% occupancy, given the new supply, isn't a terrible metric. Occupancy decline is not the risk to fret about. What is? The value decline from higher Cap Rates and a lack of perm capital for all the maturing MF construction loans in banks. These type articles are frustrating. They spin a 94% Occupancy rate into doomsday, and then make no mention of the real risk - capital lock up by banks and repricing of MF from higher interest rates and resulting Cap Rates. Ask a MF investor the difference in value from Occupancy declining 100-200 basis points from 95% to 94%, and then impact from Cap rising 200 basis points from 4% range to 6% range. I will bet all will take the nominal decline in occupancy vs a 25%+ decline in value from the Cap Rate increase - am I correct my friend Greg L? I hope the CCIM Institute still teaches this kind of analysis and hasn't cut it from its education to pay for the rebranding and new Jumbo-Size pins. A lot of CRE education has deteriorated that then results in these type articles. A suggestion to Globe Street - next time seek out a comment or some perspective from a Counselor of Real Estate or credentialed CRE expert. They could help you answer the "So What does it mean to MF value" question and then bring into focus the real concern - higher Cap Rates. Note the following from this Globe Street MF feature using RealPage data: "Markets with apartment occupancy well below 10-year averages include Jacksonville, Phoenix, Fort Worth, Salt Lake City, Atlanta, Charlotte, San Antonio, and Austin. December 2023 occupancy in these markets ranged from 91% to nearly 94%, registering below 10-year averages by 230 bps or more. Several markets in the Sun Belt made this list, which experts report is no surprise. While apartment demand across the Sun Belt states has been high, new supply volumes have surpassed demand. Austin and Charlotte are markets that experienced high inventory growth, with supply surging by 25.5% and 24.6%, respectively, in the past few years alone. However, a few large markets saw December 2023 occupancy that was right in line with decade norms. In Chicago, #cre #ccim #trepp #sior #naiop #uli #banks #apartments #nmhc #housingmarket #commercialrealestate https://lnkd.in/gKRHUDst

As demand wanes in Los Angeles for industrial real estate, we are seeing rental rates overall remain flat and are decreasing in some areas, creating a tenant favorable market. For the San Fernando & Ventura market Colliers research found that average asking rates dropped from $1.61 NNN, per SF, per month in Q3 2023 to $1.55 NNN, per SF, per month in Q2 2024. During the same period of time, vacancy increased from 1.1% Q3 2023 to 1.8% Q2 2024 (https://lnkd.in/gNcyMV-E). Over the past several months looming uncertainties in the market, high pricing, and the upcoming presidential election have deterred many tenants in the LA area from expanding their operations. This has created weaker demand and Landlords have responded by increasing rent concessions (ex. more free rent, discounted rental rates, etc) to attract tenants that are in the market for industrial space. Given the state of the market, if you are a tenant in the Los Angeles area and especially if you are a larger tenant the tide (according to every major brokerage's research data) appears to be turning in your favor. Strike while the iron is hot!