US Commercial Property

Commercial Property Lending (Mar.)

The amount of debt secured against real estate and held by commercial banks continued to grow in March. But the bigger picture is that the rate of growth of lending is showing signs of weakening and is set to deteriorate in the coming weeks and months.
Kiran Raichura 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.

19 January 2022

US Commercial Property Data Response

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.

17 January 2022

US Commercial Property Update

Comparing office occupancy changes across US metros

Combining the change in leased space with the rise in sublease availability gives a more complete picture of the change in demand across office metros since the onset of the pandemic. This gives a more intuitive match between demand patterns and rental trends that we have seen so far. This Update forms part of a set of publications that extend our existing office and apartment market analysis beyond the six major metros that we currently forecast. Over the coming weeks, we will be expanding our coverage to include an additional 11 US metros in our regular quarterly analysis and forecasts. That will include the release of a new metro focused Chartbook and enlarged office and apartment metro Outlooks.

11 January 2022

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US Commercial Property Data Response

US Metro Employment (Apr.)

Employment growth in the three-months to April was positive in all 30 of the largest metros. However, the rate of growth remains slow as labour shortages weigh on the jobs recovery. As a result, total employment in major metros such as NYC, Los Angeles and San Francisco is still down by 10% from the pre-virus peak, while Boston and Chicago have not fared much better.

2 June 2021

US Commercial Property Update

Austin and Seattle set to slide down the office rankings

Although office values have held up well in tech hubs such as Seattle and Austin, they have also seen some of the largest falls in occupier demand. Further substantial reductions in floorspace by tech companies will cause vacancy in these markets to rise further. As a result, we expect rents to be some of the hardest-hit, denting capital values and causing these metros to slide down the performance rankings.

1 June 2021

US Commercial Property Update

How far could industrial yields fall?

Industrial yields look likely to reach our end-2021 forecasts by mid-year, leading us to re-evaluate the outlook for pricing. Although gains in rents and capital values are driving increased development, we think investors’ willingness to pay for solid medium-term NOI prospects will support strong demand. The result is that we think yields will fall below 3.8% this year and trend lower still in 2022.

26 May 2021
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