Filtered by Subscriptions: US Commercial Property Use setting US Commercial Property
Global property markets are expected to see a lasting impact from the effects of the COVID-19 outbreak. Over the coming weeks, we will publish a series of pieces looking at the post-pandemic future across the main property types. We start this by …
15th July 2020
Commercial property lending weaker again as transactions slow markedly Total debt secured against real estate nudged lower again in June. More timely weekly data point to signs that residential lending has already begun to grow again as housing demand has …
10th July 2020
CMBS delinquencies have risen sharply in recent months, yet we aren’t expecting a repeat of the real estate debt meltdown witnessed in the GFC. However, non-performing loan rates are especially high in the retail and lodging sectors, meaning that holders …
8th July 2020
We expect real estate yields to spike this year due to both a rise in the property risk premium and lower expectations for property income streams. However, breaking down the observed yield gap into rental predictions and the risk premium has more than …
2nd July 2020
The hit to apartment absorption from the coronavirus has occurred at the same time as a large number of new units are set to enter the market. Even with current tenants staying put, that raises the risk of a spike in the vacancy rate. However, …
1st July 2020
It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government policies, many economies should be able more or less to …
29th June 2020
With the largest fall in occupier demand expected in New York City (NYC) and San Francisco (SF), and completions staying relatively strong in Los Angeles (LA) and SF, we expect these cities to see the largest rental declines and yield rises this year. On …
26th June 2020
Overview – In the absence of a full-on second wave of the virus, we expect a strong economic recovery in the second half of the year and into 2021. Nevertheless, we expect occupancy to fall this year as absorption turns negative in most sectors, prompting …
17th June 2020
Commercial property lending started to fall in late May Debt secured against real estate fell in May. While this was mostly driven by a decline in outstanding residential loans, weekly data show that debt secured against commercial property flattened out …
12th June 2020
The factors that drove the resurgence in home purchase mortgage demand, including record low mortgage rates, the need for more space and the anticipation of finding a bargain, will not give a similar boost to apartment rental demand. Low interest rates …
11th June 2020
As US states emerge from lockdown and the worst of the economic crisis appears to be over, thoughts are turning to the recovery. In this, not all parts of the US will be equal. Some insight into the resilience of markets can be gained by looking at …
5th June 2020
In a world in which central banks and governments are likely to ensure that sovereign bond yields stay low for the long-term, real estate is well-placed to benefit. Therefore, although we expect property yields to rise this year, we still expect …
4th June 2020
The partial recovery in REIT prices since their late March trough gives further support to our view that all-property capital value falls will not exceed 10% this year. But, with data centres, single-family homes and self-storage outperforming in recent …
29th May 2020
Property valuations improved markedly in Q1 thanks to a more-than 120 bps fall in Treasury yields as investors flocked to safe-haven assets. This marked the fifth consecutive quarter of improving valuations, with the apartments and retail sectors nudging …
27th May 2020
Consensus downgrades suggest a more downbeat mood Forecasts for all indicators in 2020 have shown a marked deterioration since the interim year-end 2019 forecast published in January. While the consensus sector ranking is in line with our March forecasts, …
21st May 2020
Measures to slow the spread of the virus have had a hugely detrimental impact on the US economy. This began to hit occupier demand in Q1, but is yet to be reflected in dramatic changes in vacancy or falls in rents. Nevertheless, valuers have already …
20th May 2020
Commercial property lending slowing, but held up by refinancing The stock of outstanding debt secured against commercial property grew again in April. But lending started to fall back in the second half of the month as demand for and supply of new …
15th May 2020
Our initial expectations that office landlords would see only a limited and short-lived fall in occupier demand have given way to a growing likelihood of a more adverse outlook. We have therefore downgraded our forecast for rent growth this year from …
13th May 2020
In light of the pandemic, our forecasts for developed market commercial property returns have been revised lower. Nevertheless, the relativities between the key markets are broadly unchanged, meaning that we still expect the US to outperform the UK and …
6th May 2020
Sharp deterioration in activity and expectations, but worse to come Commercial property agents reported a dramatic deterioration in activity in Q1 and a commensurate fall in expectations for both rents and capital values. But with lockdowns extending deep …
30th April 2020
Commercial real estate returns dip in Q1, but likely to turn negative in Q2 Data for the first quarter show that all-property total returns saw their weakest quarterly performance since the tail-end of the GFC. Given that occupier market conditions have …
28th April 2020
Relative to its performance in the GFC, the office sector should be fairly resolute in this downturn. However, the rapid growth of flexible office space poses a downside risk in some markets. What’s more, if the problems facing WeWork were to turn into a …
27th April 2020
Jobless claims have reached 26 million, but by the end of last week the share of apartment tenants making a full or partial rental payment in April was down by just four percentage points compared to usual. That demonstrates tenants are still incentivised …
24th April 2020
After a decade of relatively cautious real estate lending and steady, rather than stunning, economic growth, office development has remained fairly subdued. What’s more, for both practical and economic reasons, we see completions dropping back in the next …
16th April 2020
Signs of slowing lending growth, but bigger shifts still to come 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 …
10th April 2020
The nearly 40% peak-to-trough fall in US REIT prices points to a fall of around 5%-10% in direct real estate capital values, providing this proves to be a relatively short-lived recession. At a sector level, deeper falls for the retail sub-sector REITs …
8th April 2020
Retail property looks most heavily exposed to the disruption from the coronavirus crisis. But not all retail is equal and different sectors will see very different impacts. In our view, neighbourhood and community centres are better placed than either …
3rd April 2020
Elevated corporate bond yields suggest that property investors should be concerned about future cashflows. However, unprecedented policy support should help most companies stay afloat. And evidence from the start of the 2007-09 recession suggests that the …
1st April 2020
Overview – The spread of the coronavirus across the USA and the various containment measures will bring many businesses to a standstill. This will be reflected in rising vacancy across all four major real estate sectors. Rents will come under downward …
27th March 2020
Property has generally been at the centre of the most severe economic downturns in recent decades. But this time it is different. Although we think the commercial market is likely to experience a sharp jolt in 2020, provided the spread of the virus can be …
26th March 2020
Our base case points to investment activity falling by 45% this year, with Q2 and Q3 seeing particularly weak deal volumes, before a decent recovery in Q4. From a historical perspective, this would be a sharper fall than either of those caused by the 2001 …
18th March 2020
This Focus is a reference guide for clients of our new US Commercial Property service. It outlines the key pillars of our forecasting approach, updating previous methodological work from our established European and UK Property Services. Our five-year …
17th March 2020
Solid bank lending likely to unwind in the coming months The sum of outstanding commercial bank lending secured against real estate climbed to a new high in February. But with demand for new loans set to soften over the coming months as transactions …
13th March 2020
The additional cuts in the Fed Funds rate that we expect to see in the next couple of months, as well as the government’s likely fiscal support, will help shore up investor confidence. Despite a mechanical improvement in valuations, investment activity …
11th March 2020
The recent market meltdown reflects concerns about the economic impact of the COVID-19 virus. This will inevitably hit commercial property, but in our view, the downside is likely to be relatively modest. The spread of the coronavirus from Asia into …
6th March 2020
Property valuations generally improved a touch in Q4 on the back of a nearly 50bps fall in equity earnings yields as equity prices rose. This was the fourth consecutive quarter in which valuations had improved, albeit the smallest improvement in that …
5th March 2020
In light of the accelerating spread of the coronavirus – and the economic disruption that is likely to follow – we are pulling down our GDP growth forecasts for Q1 and Q2 of this year. Growth is likely to rebound over the second half of the year, but most …
2nd March 2020
Last year saw a fall in foreign investment into US commercial property, but South Korean inflows bucked the trend. This year could see a similar level of activity from Korean investors, but given their return targets, we don’t expect a resurgence to …
28th February 2020
We think that 2020 will be the eleventh consecutive year of double-digit total returns for industrial property. However, we also think it will be the last in this cycle, as slower yield falls from 2021 and a lower rate of rental growth keep returns in …
26th February 2020
Economic indicators have improved recently, but remain at low levels, meaning that the recovery in GDP growth is likely to be gradual. As a result, occupier demand is likely to continue to slow, keeping upward pressure on vacancy rates and causing rental …
21st February 2020
Rental growth of 3.5% to 4.5% y/y over the next five years is the key reason why we expect apartments will outperform other commercial property sectors. Stretched home valuations, tightening mortgage lending standards and a record low number of homes for …
20th February 2020
The worst commercial real estate busts have tended to follow a ramping-up in lending activity, driven by the availability of debt rising and its cost falling. However, regularly updated Fed lending data suggest that there is no real evidence of this …
14th February 2020
Rapid employment growth in the technology and information industries has been behind a surge in demand for office space in San Francisco. Even if this growth were to slow somewhat, we expect absorption to exceed new supply over the next three years, …
11th February 2020
Over the next two years we expect US property to produce total returns of over 7.5% p.a. This would be stronger than any of the last three years and, more importantly, would be a better outturn than we expect for US equities and far stronger than the …
6th February 2020
Having softened in each of the last four years, we expect US commercial property total returns to strengthen again in 2020, reaching close to 7%. Those returns will reflect a roughly 3% uplift in capital values, despite a slowdown in rental growth this …
3rd February 2020
We are launching our new subscription service on US commercial real estate by outlining six key calls that we believe will shape the sector’s story in the coming years. The macroeconomic environment of low, but steady economic growth, alongside a …
28th January 2020
NB. Please download the attached pdf for the full publication with charts. Dire predictions for US shopping centre closures appear relatively well-founded. However, for a variety of reasons – including more defensive lease terms, lower stock per capita …
3rd May 2018
