US Commercial Property
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Commercial Property Lending (Aug.)

Total real estate debt held its ground in August, as a rise in commercial debt was offset by a drop in residential. The rise in the former can be explained by rent arrears, particularly in the retail sector. The fall in the latter looks odd given continued high mortgage demand. But we suspect it reflects a rising share of non-bank lending. Looking ahead, overall debt levels look set for a period of stability.
Matthew Pointon Senior Property Economist
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US Commercial Property Update

Surging incentives reveal weakness in the office market

Office incentives packages rose to unprecedented levels in 2021, which supports our view that market conditions are weaker than asking rents suggest. Given our expectation that vacancy will remain elevated in the coming years, incentives are likely to diminish only gradually.

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17 January 2022

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Comparing office occupancy changes across US metros

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Home demand drops as prices surge

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Major Apartment Markets Outlook (Q2 2021)

With cities reopening apartment demand will see a substantial rise this year, boosted by the arrival of households who delayed a move last year. Vacancy rates will fall back in all six major cities covered in this Outlook with those hit hardest during the pandemic, NYC and D.C., enjoying the most vigorous recovery in demand as tenants return. Strong prospects for NOI growth mean yields will either edge back or hold steady this year, driving substantial capital growth in all the cities. Beyond that, a gradual rise in yields and shift to larger apartments will weigh on returns. But even San Francisco, which will suffer from its high concentration of tech workers, should see total average returns of around 5.0% p.a. from 2021-25. At the other end of the spectrum, D.C. will outperform with average total returns of 8.5% p.a.

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Valuations still reasonable despite house price boom

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