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Commercial Property Lending (Dec.)

Commercial real estate debt ended 2021 with its largest monthly increase since the onset of the pandemic. Against a backdrop of strong investment activity, we expect commercial property lending to have a strong start to 2022.
Sam Hall Assistant Property Economist
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US Commercial Property Chart Book

Metro upturn continues, but capital growth set to slow

The metro level data confirmed another strong quarter for commercial real estate in Q1, though with the usual wide range of performance across sectors and cities. For offices, rents in the larger coastal markets continued to trail for the most part, while life sciences in Boston and San Diego helped lift their performance to the top of the rankings. Sunbelt markets were the strongest for apartments, as the recent rental growth in major metros such as NYC cooled somewhat. And in the industrial sector, while most markets shone, LA and Riverside saw exceptional capital value growth. The party may soon be over, however, with risk-free interest rates rising and yields set to follow, pointing to much slower capital growth ahead across the board.

24 May 2022

US Commercial Property Chart Book

Another punchy quarter, but capital growth set to slow

Setting aside the drag from net exports on GDP growth, Q1 was another strong quarter for both the domestic economy and commercial real estate markets, highlighted by a record first quarter for investment volumes. But occupier demand is slowing in all four sectors (albeit from record highs in industrial) and the sharp hike in alternative asset yields is already squeezing property valuations. As a result, we think that investment totals should slow in H2 and commercial real estate yields, particularly in the apartment sector, will begin to rise.

20 May 2022

US Commercial Property Data Response

Commercial Property Lending (Apr.)

Lending growth accelerated in April, seeing the strongest monthly gain in over 12 years. And with transactions having seen a fast start to the year, we think there is more to come in the next few months. Property Drop-In (19th May): What will rising interest rates mean for commercial property returns in the US, UK and Europe? Join our 20-minute briefing on the outlook for returns on Thursday. Register now.

16 May 2022

More from Sam Hall

US Commercial Property Update

Lessons from 2021

2021 proved a challenging year to forecast commercial property markets. Indeed, we underestimated the speed and size of the bounce back in performance, albeit by less than the consensus. But there are lessons to be learned from last year’s experience, so before we look forward to 2022 it is helpful to reflect on where we were right and wrong in 2021 and why.

5 January 2022

US Housing Market Data Response

Existing Home Sales (Nov.)

Existing home sales continued to climb higher in November, leaving sales just short of their peak last year. But we expect a tight inventory and stretched affordability as mortgage rates rise to weigh on sales over the next six months, causing them to fall back to around 5.80m by mid-2022.

22 December 2021

US Housing Market Data Response

Housing Starts (Nov.)

Single-family housing starts rebounded in November, following a weak four months. While strong new home demand, limited inventory and surging house prices will incentivise builders to increase construction, the recent surge in lumber prices will add to the supply-side challenges weighing on starts.

16 December 2021
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