US Commercial Property

Commercial Property Lending (Aug.)

All real estate sectors saw growth in outstanding debt for the second consecutive month in August. What’s more, the third consecutive monthly increase in commercial real estate debt of more than $10bn points to continued strong investment activity in the first half of Q3, which we expect to continue.
Kiran Raichura Senior Property Economist
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US Commercial Property Update

Downtown offices not losing out everywhere

National office data suggest that suburban office markets have significantly outperformed downtown offices since the onset of the pandemic. But metro-level data point to a more nuanced picture in which metros reliant on commuting have seen downtown areas hit hardest, but those with a decent share of reverse commuters have seen a more balanced picture. The next 12 months will help to determine whether this is a temporary or longer-term factor.

18 October 2021

US Commercial Property Data Response

Commercial Property Lending (Sep.)

Outstanding real estate debt increased for the fourth consecutive month in September, thanks to net lending turning a corner in the residential sector and accelerating in the commercial sector.

15 October 2021

US Commercial Property Update

Four likely winners in retail

The retail sector appears to be turning a corner, and we think that convenience-oriented Neighbourhood and Community (N&C) centres, out-of-town retail, “destination”-type malls and retail located in “desirable” southern metros are likely to be the sector’s winners over the next few years.

8 October 2021

More from Kiran Raichura

US Commercial Property Outlook

Retail on the cusp of a recovery

This quarter there are short-term upgrades to all four major sector forecasts for 2021 on the back of strong investor demand for assets, which is driving up prices. Those upgrades mean that returns in the industrial and apartments sectors will be exceptionally strong in 2021-2022 at around 15% p.a. and 13% p.a. respectively. But perhaps the bigger and more surprising story is that the retail sector is showing signs of turning a corner. As a result of the improved outlook, across the 2022-25 period, retail is our best-performing sector, led by the power centre and neighbourhood and community centre sub-sectors, with average returns in that period of 6.5%-7% p.a. Offices remain the weakest performers at a sector level, although we continue to think that Grade A stock will outperform the average.

10 September 2021

US Commercial Property Chart Book

Office metro-level divergence to persist

After a period of strong economic growth in H1 2021, with high inflation squeezing incomes and the spread of the Delta variant, the outlook for H2 is less positive. That said, we don’t expect this to have a major effect on occupier markets, which will continue to be driven more by structural factors than cyclical ones. Low interest rates and a more stable economic outlook are driving strong capital flows into real estate, with the apartment and industrial sectors the major beneficiaries. Yields in those sectors have hit all-time lows and are set to fall further in H2, driving rapid rates of capital growth this year. Large metro-level divergences in performance are set to persist as readjustments in working, living and shopping patterns continue.

18 August 2021

US Commercial Property Data Response

Commercial Property Lending (Jul.)

Outstanding real estate debt growth accelerated in July, supported by increases in residential, multifamily and non-farm commercial real estate debt. And with demand for loans growing on the back of strong investor demand for commercial real estate, we expect further growth in the coming months.

13 August 2021
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