US Commercial Property
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US Commercial Property

US Commercial Property Update

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 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

US Commercial Property Update

Will remote working migrants drive office demand?

In-migration to southern metros with relatively low living costs and high desirability will be positive for office demand in those same metros. We think firms will be encouraged to set up offices in those locations given the growth in their skilled labour pools and the potential economic benefits. This means that, at the margin, rather than office-using jobs attracting talent, the location of the talent will attract firms.

4 October 2021
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US Commercial Property Update

Limited risks to DM property from Evergrande

The Evergrande crisis has made waves in financial markets this week. But, while the developed property markets we cover may see some short-term upheaval, we think the impacts outside of China are unlikely to be severe or lasting. In view of the wider interest, we are also sending this UK Commercial Property Update to clients of our Commercial Property and Housing Services.

US Commercial Property Update

Three reasons why Chicago will emerge a winner

Chicago’s office market will not escape the gloomy outlook caused by the shift to remote working. But we expect the low level of rents, the small share of jobs in the information sector, and a dwindling supply pipeline to limit rental declines over the next few years more so than in the other major metros.

US Commercial Property Update

Are we underestimating the global property upturn?

The most recent commercial property data have been surprisingly upbeat and have raised the possibility that the recovery could be stronger than expected. But we think investors may have run ahead of themselves and this trend is unlikely to be sustained given the weak rental outlook. In view of the wider interest, we are also sending this UK Commercial Property Update to clients of our US Commercial Property service & European Commercial Property Service

US Commercial Property Update

New apartments will start to get larger soon

Apartments kept getting smaller in the second quarter of this year, with the median floor space of units falling to under 1,000 sq. ft., the lowest since records began in 1999. That trend seems at odds with rising demand for larger units to accommodate increased working from home. We suspect that dichotomy in part reflects lags in the development process, not helped by COVID-19, as well as surging steel prices. But with demand for bigger units here to stay, we don’t think it will be long before units start to get larger. We expect median floor size for multifamily starts will be back above 1,000 sq. ft. by the end of the year. In view of the wider interest, we are also sending this US Housing Update to clients of our US Commercial Property service

US Commercial Property Update

New supply won’t have major impact on industrial rental growth

Despite a higher construction pipeline for distribution warehouses, we think that a high share of pre-let space, coupled with strong demand, means vacancy will only be 20bps higher over the next few years as a result. In turn, we don’t expect it to have a large impact on rents, though it does pose some downside risk to our forecast.

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