Filtered by Subscriptions: US Commercial Property Use setting US Commercial Property
Real estate potentially has a significant role to play in helping achieve ambitious climate targets. We have estimated the size of the risks in the transition to net zero for the commercial property markets that we cover. This risk varies widely across …
14th January 2022
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 …
11th January 2022
The US economy is set to slow this year as elevated inflation and higher interest rates squeeze spending. Nevertheless, at the all-property level, we expect rental growth of around 3% y/y and NOI yields to see another large fall, driving double-digit …
6th January 2022
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 …
5th January 2022
Overview – Our stronger national office forecast this quarter mean upgrades to all six major markets. The largest of those uplifts is in Boston, which has seen a sharp rise up the rankings and where we expect total returns to hit double-digits in 2021 and …
23rd December 2021
Overview – Apartment markets in major coastal cities underperformed the national average in 2021, as they were more heavily impacted by lockdowns and the move of some households to cheaper, sunbelt cities. But as long as Omicron doesn’t throw a spanner in …
17th December 2021
The rapid bounce-back in the US economy along with still-loose monetary policy will drive continued strong performance in real estate in 2022, when we expect returns to exceed 12%. That would see the US outperform the UK and euro-zone by 5%-pts and 3%-pts …
15th December 2021
Commercial property lending maintains momentum Commercial real estate debt recorded its largest gain in November since the onset of the pandemic. And with investment volumes on track for a record-breaking year, we expect lending activity to remain …
13th December 2021
Overview – The major change to our forecasts this quarter is that we now see strong demand for assets persisting well into 2022 and pushing yields down further. That is true in all sectors, with retail and offices joining the party, but with industrial …
10th December 2021
The pandemic turbo-charged a move away from major coastal cities, and that drop in demand led to a sharp fall in their rents relative to the national average. But with those moves now made and cities reopening, we doubt they will continue to get cheaper. …
9th December 2021
Office jobs fully recovered in 17 metros; easing virus cases benefit the South The easing of the Delta wave of infections in the South boosted leisure & hospitality hiring in October. Meanwhile, office-based jobs rose in all 30 metros, following …
2nd December 2021
Against both our proprietary in-house valuations and a more traditional fair value analysis, real estate looks cheap despite recent yield falls. Indeed, our analysis suggests yields could fall by 30bps by end-2023 and still be fair value. But as this …
1st December 2021
Rising equity earnings yields and government bond yields squeezed property valuations in Q3. While pricing still looks reasonable at the all-property level, the industrial sector is starting to look overvalued on a historical basis, with yield falls …
24th November 2021
Data show a vast divergence in performance across the industrial sector over the last year. While some of the strength is consistent with that in the apartment and office sectors, driven by migration to the South, others have been supported by …
23rd November 2021
Google mobility data show a much fuller recovery in visitors returning to retail and recreation than to the workplace. This supports our view that structural changes will weigh on the office sector more than retail over the next few years, helping to make …
19th November 2021
Economic growth slowed in Q3, but we expect it to pick up again in Q4. And with earnings growth and inflation at high levels, we see the Fed Funds Rate and 10-year bond yields rising over the next few years, reflecting the upturn in economic activity. …
18th November 2021
Lending set for strong finish to the year Outstanding real estate debt increased for the fifth consecutive month in October, driven by positive net lending in both residential and commercial real estate (CRE) sectors. We think that this reflects the rapid …
12th November 2021
The faster-than-average recovery in financial sector employment in the Miami metro owes much to new office openings by banking and finance firms in the last 18 months. This has made Miami one of the best-performing office markets since the end of 2019 and …
8th November 2021
REIT pricing appears consistent with our view that retail values are nearing a turning point while office values have a bit further to fall. But a strong recovery in industrial and apartment REITs means that there is some upside risk to our capital value …
4th November 2021
Austin, Phoenix and Tampa regain job shortfalls, while six major metros lag While the 3m/3m growth rate was positive in all metros in September, employment fell in Baltimore, Detroit, Los Angeles and Pittsburgh on the month. That left employment in just …
3rd November 2021
Recent data releases and surveys show a booming commercial real estate market, particularly in the industrial and apartment sectors. While the level of prices is raising some eyebrows, we don’t see cause for concern yet. Nevertheless, we expect the rate …
2nd November 2021
Survey indicators suggest quarterly capital growth may have peaked Overall sentiment saw little change this quarter, but there was a notable reduction in office occupier demand and three-month rent expectations. The bigger picture is that, with no …
28th October 2021
Upgrades across the board in 2021, but increased sector divergence in 2022-23 Consensus forecasts for 2021 have been upgraded in all four major sectors on the back of strong investor demand. But tellingly the picture is more varied for 2022-23, where …
27th October 2021
Strongest quarter for 16 years points to the best annual return since the GFC The NCREIF index recorded a huge 5.2% quarterly return in Q3 thanks to further improvement in all sectors. With no sign of any let-up in investment demand, that puts annual …
26th October 2021
Americans are returning to cities, but the return to the office has been much slower. We see suburban areas being net winners in the residential and retail sectors, although the picture for downtown versus suburban offices is less obvious than the …
22nd October 2021
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 …
18th October 2021
Net lending returns to pre-COVID levels Outstanding real estate debt increased for the fourth consecutive month in September, thanks to net lending turning a corner in the residential sector and accelerating in the commercial sector. Total outstanding …
15th October 2021
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 …
8th October 2021
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 …
4th October 2021
Overview – The apartment market is set for a stellar year. The reopening of cities is bringing vacancy rates down and pushing rents up, and strong investor demand has led to a sharp fall in yields. We expect national total returns of around 19% in 2021. …
1st October 2021
Delta variant hits leisure & hospitality jobs in over a third of metros Delta variant fears resulted in leisure and hospitality employment falling in 12 of the 30 metros. Of these, Atlanta, Austin, Charlotte and Dallas were the worst hit. Leisure and …
29th September 2021
We think that for the extra one million footloose American workers created by the pandemic, the cost of living has become far more important to their decision of where to live than in the past, while the “desirability” of a metro and its climate have also …
28th September 2021
Overview – With absorption of landlord-held office stock set to remain negative for the foreseeable future, we continue to expect vacancy rates to climb and rents to fall in all six major office markets over the next few years. That will be particularly …
27th September 2021
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. For property investors, …
23rd September 2021
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 …
17th September 2021
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 …
16th September 2021
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 …
14th September 2021
Signs point to further strong lending volumes in the coming months All real estate sectors saw growth in outstanding debt for the second consecutive month in August. What’s more, the third consecutive monthly increase in commercial real estate debt of …
10th September 2021
Overview – This quarter there are short-term upgrades to all four major sector forecasts for 2021 on the back of strong investor demand for assets, which is driving up prices. Those upgrades mean that returns in the industrial and apartments sectors will …
Employment still 5%-10% below pre-COVID level in six major metros Job growth showed no sign of slowing in July, with gains in the leisure & hospitality sector continuing to drive the recovery. This benefitted Boston, Washington D.C. and New York City …
1st September 2021
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 …
27th August 2021
Following a sharp deterioration in the previous quarter, property valuations held steady in Q2. But while changes so far in Q3 point to only a slight worsening in valuations, we expect Treasury yields will turn a corner and rise to 1.75% by end-2021, …
23rd August 2021
The eviction ban has been extended to early October, but we doubt it will be renewed again. Given the strength of the labour market, significant government support and robust rental demand, the resumption of evictions will not boost the rental vacancy …
19th August 2021
After a period of strong economic growth in H1 2021, with high inflation squeezing incomes and the spread of the Delta variant, the outlook for H2 is less positive. That said, we don’t expect this to have a major effect on occupier markets, which will …
18th August 2021
Signs point to further strong lending volumes in the coming months Outstanding real estate debt growth accelerated in July, supported by increases in residential, multifamily and non-farm commercial real estate debt. And with demand for loans growing on …
13th August 2021
Cities are central to property performance. And the largest are seen as hugely important by investors. But the pandemic has turned many received ideas about real estate on their head and we think that performance in gateway markets will remain relatively …
10th August 2021
Surging demand for single-family homes has revived institutional investor interest in the single-family rental (SFR) market. With few homes available to buy, interest in build-for-rent (BFR) investment is growing. But given constraints in the home …
3rd August 2021
Market sentiment rebounds, while office picture brightens Improvements in occupier demand boosted market sentiment in Q2. With over half of surveyors perceiving the property cycle to be in an upturn, prospects for H2 performance look solid. But while we …
29th July 2021
Office-based jobs return to pre-pandemic level in nearly a third of metros Employment growth accelerated in June, helping office-based employment return to pre-pandemic levels in almost a third of metros. But the 3m/3m growth rate in total employment was …
28th July 2021
Q2 returns point to investors becoming increasingly aggressive on pricing All-property total returns strengthened again in Q2, reflecting improvement in all sectors. Industrial returns set a new quarterly record for the sector, while office and retail …
27th July 2021
