Filtered by Subscriptions: US Commercial Property Use setting US Commercial Property
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 …
10th September 2021
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
The recent gains in lender sentiment showed the real estate recovery is heading in the right direction. As lenders gain confidence, standards should start to loosen, and industrial and multifamily borrowers will continue to benefit. But uncertainty around …
26th July 2021
Our forecasts, which cover landlord-held space, point to San Francisco vacancy peaking in 2025 at over 24%. Broker data, which also incorporates sublease vacancy, suggests much of that adjustment has already taken place. But though there are early signs …
21st July 2021
We have pulled back our expectations for Treasury yield rises this year and, to a lesser extent, next year. At the margin, this is positive for real estate pricing as it means that the property to bond yield gap will stay wider for longer. However, with …
16th July 2021
There is mounting evidence that the exodus from cities is winding down. As economies reopen, we think that cities will come back to life, bringing a wave of new demand for high-rise apartments. But once the dust settles, the shift to working from home …
9th July 2021
The pandemic has accelerated growth in scientific research and development, prompting a boost to demand in key R&D clusters. While we don’t expect the current rates of growth to be sustained, we think the outperformance of this sector could persist for …
8th July 2021
Employment still down 10% despite gains in leisure and hospitality Employment growth in May was positive in all metros, largely driven by gains in the leisure & hospitality sector. This benefited Orlando, Los Angeles and Las Vegas the most, but still left …
30th June 2021
Overview – With cities reopening apartment demand will see a substantial rise this year, boosted by the arrival of households who delayed a move last year. Vacancy rates will fall back in all six major cities covered in this Outlook with those hit hardest …
29th June 2021
The student accommodation sector faces high levels of uncertainty for the fall 2021 academic year. In our view, demand for student housing will rebound from last year, but fall short of its pre-pandemic peak. Overall, we expect vacancy to nudge higher and …
25th June 2021
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 …
23rd June 2021
Overview – 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 …
18th June 2021
Recent strong inflation data have heightened concerns about global price pressures. At present, we think there will be limited impact on short-term property performance. Further out though, higher inflation expectations reinforce the view that bond yields …
16th June 2021
CRE lending growth to ramp up slowly this year 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 …
11th June 2021
Overview – The economic recovery continues in earnest, but this is raising questions about quite how transitory the current high rates of inflation are. We think that core inflation will stay elevated, which will force the Fed to push up rates in late …
10th June 2021
With emission targets needing to be met by 2030, the race is on for the real estate sector to decarbonise. By forcing tenants and landlords to share the risks, benefits and costs of environmental policies, green commercial leases are a promising tool, and …
Slow jobs recovery means employment in largest metros still 10% down 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 …
2nd June 2021
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 …
1st June 2021
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 …
26th May 2021
Following a sharp increase in Treasury yields, property valuations worsened for the second consecutive quarter in Q1. And we expect 10-Yr Treasury yields to resume their upward trend to reach 2.25% by end-2021, which will squeeze property valuations …
21st May 2021
Consensus more optimistic about industrial and apartments Consensus forecasts for the next two years have been revised upwards, largely driven by a more upbeat view on the industrial sector. As a result, we are now more downbeat than the survey …
19th May 2021
Lending standards set to ease in the coming months Outstanding commercial real estate debt nudged higher in April. And with the vaccine rollout allowing more of the economy to reopen and lending standards set to loosen, we expect to see further gains in …
14th May 2021
Increased demand for larger apartments to accommodate working from home is already evident in NYC, where the inventory of units with two or more bedrooms has seen a sharper decline compared to smaller units. With working from home set to stay even as …
The economic recovery looks well-set, which should support occupier markets. However, structural change in the office sector means that occupier demand continues to fall, even while the beleaguered retail sector is showing improvement. Both of those …
13th May 2021
There currently appears to be little economic scope for conversions to residential across the six major office markets. But our forecasts of falling values and rising vacancy in the office sector suggest the incentive will increase, particularly in NYC …
7th May 2021
Industrial has strong start to 2021; office and retail fall further behind Weakness in office and retail occupier demand weighed heavily on market sentiment in Q1. Commercial property agents are therefore downbeat about rental and capital values in these …
29th April 2021
Domestic tourism could be key to spring and summer outperformance Employment growth in the three-months to March was positive in almost all metros, but those in southern states tended to be the better performers. With Miami’s hospitality sector performing …
28th April 2021
Q1 returns point to upside risk to our forecasts, particularly for industrial All-property total returns rose again in Q1, driven by improvements in all sectors, although retail and hotel returns were again negative. But the industrial sector boom …
27th April 2021
We expect a strong recovery in TV and film-related employment will support office demand in LA over the next five years. Alongside a relatively small development pipeline and low office rents, this means we expect vacancy rises and rental value falls in …
23rd April 2021
In our recent Office and Apartment Outlooks, we identified Washington D.C. as the top performer over a five-year forecast in both sectors. Those expectations are driven by several factors influencing both supply and demand, but none of these is more …
20th April 2021
The easing of virus restrictions and return to offices for many white-collar workers will mean that apartment markets in cities such as NYC and Washington D.C. will outperform this year. But we think the longer-term outlook is most favourable in Sunbelt …
15th April 2021
Property investment volumes held up better than we anticipated in 2020, and we are expecting 2021 to be a solid year for investment. We think that pent-up demand and the reopening of the economy will help transaction volumes reach over $500bn this year, …
14th April 2021
Commercial property debt to benefit from easing restrictions Commercial real estate debt fell for the second consecutive month in March. That likely reflects weak investment activity due to virus restrictions. But, as constraints continue to ease and …
9th April 2021
Leisure & hospitality sector re-openings will drive H1 2021 outperformance Employment growth in the three-months to February was heavily influenced by the rate of virus cases and consequent restrictions in place. And office-based jobs growth is still …
7th April 2021
Overview – All major city apartment markets will benefit from the reopening of the economy and reduction in remote work, with rental demand also supported by record low numbers of homes for sale. New York City and D.C., which both saw large falls in …
1st April 2021
Overview – There are forecast downgrades across the board this quarter, owing to the changes to our occupier demand expectations at the sector level. The markets broadly split into three pairs. New York City and San Francisco could see capital values fall …
31st March 2021
Overview – The vaccine rollout and stimulus bill are unquestionably positive for the economy but may be a mixed blessing for real estate. Those two factors are probably most positive for the apartment sector, given that they have put more cash in the …
25th March 2021
Thanks to changing consumption patterns and structural and cyclical knocks to the traditional property sectors, both occupier and investor demand for data centres set new records last year. But, while further strong growth is likely, we don’t expect these …
19th March 2021
Our analysis suggests that both higher asking rents and a greater proportion of information jobs have been associated with a larger rise in sublease vacancy in recent quarters. We think there are good reasons for this and expect these factors to be key to …
17th March 2021
Fall in commercial property debt not the start of a sharp decline After a stronger than expected increase in January, commercial real estate debt fell back in February. This suggests that last month’s gain was a one-off and not the start of a rapid …
12th March 2021
