US Commercial Property
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Have we been too pessimistic about pricing in 2020?

Third quarter data make it look increasingly likely that our year-end price forecasts will prove to be too negative. However, with the UK still on course for a capital value fall of close to 10% this year, this doesn’t necessarily mean that the US or euro-zone markets are through the woods yet.
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

More from Kiran Raichura

US Commercial Property Update

Offices set for a prolonged performance divide

The pandemic has heightened occupiers’ focus on the quality and green credentials of the space they occupy. This trend is set to impact on demand, with modern, well-configured buildings with green building certifications set to attract tenants at the expense of older stock. We expect investors to increasingly differentiate between these assets in the next few years.

23 June 2021

US Commercial Property Outlook

Major Office Markets Outlook (Q2 2021)

The start to the year has been in line with our expectations, meaning that falls in absorption and rents have generally accelerated in the six major metros. Owing to their relatively low rents and smaller shares of tech workers, we expect Washington D.C., Los Angeles and Chicago to be the top performers in our forecast period, registering average total returns of around 3.5%-4% p.a. On the other hand, New York City and San Francisco are set to be the worst performers, with rents falling by 13%-15% peak-to-trough and capital values ending the period 15%-17% lower than at the end of 2019. Total returns for those two metros will therefore be sub-2% p.a. in 2021-25. Boston will outperform those two hard-hit metros, but not by a great deal, producing returns of 2%-2.5% p.a., only a little below the US average.

18 June 2021

US Commercial Property Data Response

Commercial Property Lending (May.)

Commercial real estate debt held by banks grew again in May. But while we expect growth to accelerate as the year progresses and confidence returns, investor caution toward the office and retail sectors will ultimately limit the pace of the recovery.

11 June 2021
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