2015 has been a banner year for commercial/investment real estate, with gains in sales over previous years.
Various markets worked themselves out of the Great Recession, and investors finally shook off their doubts about the still lackluster economy and plowed forward. With this move forward there seem to be four trends emerging that are worth watching:
1) Increased global investment in the U.S. market --
No surprise here. The United States is still a pretty safe place to invest. While prices are on the way up, depressed values attracted international buyers to all market segments. The Wall Street Journal predicts that the commercial real estate
environment will continue to see increased global investments into US
markets, thus propelling the strength of the US commercial real estate
market. Very cool.
2) Increasingly competitive markets
Unlike decades past, urban cores are growing. Investors are funding new projects. Business owners have far more options regarding new vs. older properties. Being this selective, owners are being forced to provide high efficiency and increased effectiveness. Increased markets means savvy lessors can excel by providing specialized assistance to clients and by
meeting more specific requests of an increasingly eclectic clientele.
3) Urban divisions
Many millennials prefer housing that is located in developing
urban core, including new, recently gentrified pockets. As such, demand for quality multifamily is skyrocketing in previously decaying urban areas. Gone are the
days of focusing on an inner core of a community and having to branch
from the outside in. Urban "pockets" are popping up everywhere, and are able to provide
increased space for a far more eclectic clientele.
4) Retail bifurcation
Even in non-urban areas, an increase in bifurcation is continuing to
build. Seeing retail shops of varying levels in the same area is
becoming more prevalent and will only continue to be the norm. Filling
spaces with high-end retail establishments paired with middle and lower
end ones is becoming much more common and preferred. Property managers
who keep this in mind will be able to keep spaces filled to capacity
more quickly and consistently.
CRE is hot right now in most markets of the U.S. For an analysis of your market, and strategies to get you where you want to be via commercial/investment real estate investments, drop me a line!