Brian D. Bailey, CCIM, Senior Financial Analyst/Commercial Real Estate at the Federal Reserve Bank of Atlanta, presents information related to commercial real estate in the United States.
Video: Reis Senior Economist Barbara Denham Provides U.S. Industrial Property Market Update
In this brief video, Barbara Denham, Senior Economist at Reis, discusses the industrial property market nationally, including performance and trends in rent and vacancy. During this video a chart is displayed showing, over the past several years, steady rent growth and a (likewise) steady decline in vacancy rates. Ms. Denham notes that last year 78 million square feet of industrial property was constructed, and a similar amount is projected over the next year. She further noted that they projection 100 million square feet of absorption, and thus a declining vacancy rate. She stated that they project rent growth to lessen to about 2.4% over the year. Asked about the impact of the election of Trump to the Presidency, she opined that – particularly if a trade war ensues – industrial property could definitely be impacted, but that they have not yet including any such effect in their projections.
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Video: Forecasting the Office Market with CoStar’s Director of Office Property Research: Cap Rate Forecasts; NOI Growth Projections; More…
Walter Page, Director of Office Property Research with CoStar makes forecasts for the office property market forecast for 2017 and beyond, including interest rates, cap rates, and demand in this video from The Commercial Real Estate Show.
He notes that cap rates have been flat for office properties in the prior year, holding at 5.7% for institutional office properties and 7% for the median of the market office properties, which he specifies as class B office buildings. He believes the end of cap rate decreases are due to perceived growth prospects diminishing and an increasing expectation of rising interest rates. He forecasts a 20-30 BP increase in cap rates next 2 to 3 years, which would translate into a drop in values but for projected NOI growth. He believes that NOI growth will more or less offset the drop from increasing cap rates, resulting in stable values for the next couple of years.
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Video Profile: Downtown Miami At A Glance
Just when people started to think they have a focus on downtown Miami it changes. The one thing constant in downtown is change you blink it changes. One just need look at the last 10 years at Miami’s urban core to see that this it is one of the fastest evolving areas anywhere in the world.
Miami has become a global center with over five billion dollars of international investment in the last few years alone. Investors who see downtown Miami as an epicenter for trade and commerce as the Wall Street of the South. It is a place where property values have been on the rise, and it’s a great place to live.
Practically no one was living in downtown Miami at the turn of the millennium. Now, there are more than 80 residential developments built between 2003 and 2008. In fact more than 24,000 new condos have come online. Now, they are fully occupied with young professionals ,families and city-dwellers, entertaining themselves downtown at nigh. Downtown has experienced more than eighty percent growth over the last 10 years. Its residents are being joined by newcomers moving into developments like Brickell City Centre and others. There are now more than 300 restaurants downtown, open and doing well. There are about a dozen new luxury hotels with over 6,000 top quality hotel rooms.
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Green Street says Mexican Fibras Adopting REIT Best Practices
In this REIT.com interview David de la Rosa, vice president with Green Street’s Advisory & Consulting, shares an overview of the Fibra market. A Fibra is an investment trust vehicle under the laws of Mexico that is dedicated to the acquisition and also the development of real estate assets within Mexico that are intended for leasing. FIBRAs are similar to real estate investment trusts, or REITs, in the United States. This vehicle provides a new investment opportunity for investors. The Fibra market, in which Mexian pension funds are major investors, is expected to grow quite rapidly in size. Green Street Advisory and Consulting has served as strategic advisor to numbers of real estate companies in Canada, Mexico, and Europe.
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Video: CNBC Discusses Data Center Real Estate and the REITs That Own It
CNBC’s Nightly Business Report discusses the Data Center REIT sector, which sits at the crossroads between technology and real estate. Data centers present investors with unique analytical challenges, including risk assessment of technology-driven economic obsolescence. However, there is opportunity for those investors willing to undertake the analytical effort of understanding the sector.
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Video: Answering the question of whether one should sign a tenant rep agreement with a broker to lease office space
The host of The Commercial Real Estate show answers the question of whether one should sign a tenant rep agreement with a broker to lease office space. His answer, which we concur with, it a resounding yes! Tenant reps can provide not only information about the market and available spaces, a good tenant rep can help guide a tenant through the negotiation process.
Information on our tenant representation services can be found here,
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Video: Fitch Ratings Managing Director Steven Marks Discusses the Performance of and Outlook for Office REITs
Steven Marks, Managing Director at Fitch Ratings, appears on The Commercial Real Estate Show to talk about office real estate investment trusts and their outlook.
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Video answers the question: Can an agent tell me what my commercial property is worth?
In this quick video from The Commercial Real Estate Show, host Michael Bull answers a common question; “Can an agent tell me what my commercial property is worth?” His answer is yes and no, yes if it is more of an indication of value, but no if it is to provide a loan or for a more formal valuation. I would note that I am asked about and opine on value on a regular basis, but always note it as only an opinion of value. Nevertheless, commercial brokers generally have a good idea of value, and given that they tend to provide these opinions at little or no cost, they can be a great first step in considering value and listing price. Anyone with a real estate license in Florida should be aware that an appraisal can only be performed by a qualified appraiser.
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Video: The Chief Economist of Reis Explains Cap Rate Methodology
In this video an overview of the Reis Cap Rates methodology is presented by Dr. Victor Calanog, its Chief Economist. Cap rates are a measure of a property’s investment potential, independent of a specific buyer. Investors, lenders, and appraisers use cap rates by Reis and others to estimate the appropriate purchase price for different types of income producing properties, including retail, industrial, office, and multifamily properties.
Reis notes that it offers three different cap rates per property in its Sales Comps module:
– An Estimate of Going-in Cap Rate
– 12-Month Rolling/Trailing Metro Cap Rate
– Reported Cap Rate
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Video: Are letters of intent (LOIs) binding?
In this short video, The Commercial Real Estate Show host Michael Bull discusses whether letters of intent are binding. Related to this, readers might be interested in the language in the Florida Realtors Commercial Contract (CC-4), a form often used for commercial property transactions. Within this Florida CC-4 form is an optional provision for a due diligence period that is often selected and that readers will want to familiarize themselves with, whether on the buy side or sell side of a commercial property sale.
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Video: CoStar’s Director of Office Property Research Provides an Update: Office Construction vs. Norms; Rent Growth Year Over Year; Vacancy by City; More…
Walter Page, Director of Office Property Research for CoStar, provides and update on the Office Market in this video from The Commercial Real Estate Show. This update on the office property market includes performance, construction, and supply.
Walter presents and discusses a chart of new office property construction versus norms by city, a chart – grouped as to whether new construction is less or more than historical norms and then sorted by the proportion of new construction to existing square footage – that in which Miami sits right in the middle. Eyeballing it, Miami’s new office construction appears to be a bit under 20% higher than historical norms.
He then reviews a chart on rent growth year over year for prime/suburban office properties versus secondary business districts, noting a narrowing spread in rent growth rates between them.
A third chart reviewed is newer office building property (less than 10 years old) vacancy rates by city, illustrating where this metric lies as under construction supply is considered, i.e. where vacancy rates would be if all this new office property was available now. Of 25 markets represented, Miami (also see Miami office property trend charts) is the third highest when available under construction office properties are considered, i.e. the third worst. Of course, what this chart doesn’t take into account is how growth in Miami may cut into this soon to be available supply, but it is an interesting metric to note, regardless.
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Video: John Bejjani of Green Street Takes on Topic of Current Commercial Real Estate Valuations
In an interview with Allen Kenney of Reit.com John Bejjani, an analyst with Green Street Advisors, a company with over 100 employees including more than 40 research professionals that provides actionable intelligence for commercial real estate investors, discusses the commercial real estate market. Highlights include:
- Cash flow and operating income growth remains healthy
- Cap rate outlook is mixed
- Overall real estate seems fairly valued
- Apartments (multifamily) and malls are relatively cheap
- Industrial and retail strip centers are relatively expensive
- Office properties are the most expensive
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