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From the Editor: Post-pandemic Resilience
Interest rates may come down this year but until they do, a sense of uncertainty lingers in the industry, especially in the office sector. However, bright spots are on the horizon.
Possible generational buying opportunities await those who have amassed capital (see The New Realities of CRE Investing). Additionally, nearshoring and onshoring trends are bolstering the development of manufacturing facilities, but hard tech startups will need developers to provide specialized space in short order (see Advanced Manufacturing’s Rapid Growth: Finding the Right Real Estate).
Canada’s first commercial Zero Carbon Design Standard building — The Stack — demonstrates a market for future-forward office space in Vancouver (see Soaring to Zero Carbon). Finally, be sure to read about Mark IV Capital’s unique buying opportunity that resulted in a master-planned logistics and industrial district near Reno, Nevada.
Stay informed,
Jennifer LeFurgy, Ph.D.
Editor-in-Chief
In Brief
Notable facts and figures on the state of the commercial real estate industry, culled from media reports and other sources.
Industry Outlook
25%
The percentage of respondents in the first quarter of 2024 expecting to deploy capital in the next six months, according to Altus Group’s quarterly Commercial Real Estate Industry Conditions and Sentiment Survey for the U.S. Only 7% of respondents held the same expectation in Q4 2023.
542
The number of loans that were modified, with cumulative balances slightly over $20 billion, of the $162 billion in securitized commercial mortgages that matured in 2023, according to CRED iQ. That represented a 150% increase in the number of modifications that occurred the prior year.
Office
23.3 Million
The number of square feet of net absorption that highly amenitized office buildings in the United States have collectively gained since the onset of the pandemic, as reported by JLL. In comparison, the remainder of urban Class A product has lost more than 50 million square feet of occupancy.
71
The number of markets (out of the 120 covered by Yardi Matrix) that have experienced year-over-year declines in office-using employment. Among the top 25 markets, 16 have seen negative growth over the past year, and only Miami has experienced growth of more than 2%.
$425 Million
The amount the Biden administration’s 2025 budget plan proposes giving the General Services Administration to right-size the federal government’s real estate footprint and sell unneeded office space, as reported by Federal News Network.
Industrial
85%
The share of trades in the first two months of 2024 that were for industrial facilities sized under 100,000 square feet, as reported in Marcus & Millichap’s 2024 Industrial National Investment Forecast. “Such properties face limited pressure from new supply and generally enable buyers to allot more capital toward upgrades.”
Housing & Multifamily
38%
The amount by which the average monthly mortgage payment for a newly purchased home exceeds apartment rents in the United States, based on recent research from CBRE. “While these costs historically aligned closely, average mortgage payments, including taxes, have risen by 75% since late 2019, creating a persistent gap between mortgage payments and rental costs.”
806,000
The number of additional senior housing units that will be needed by 2030 based on data from the National Investment Center for Seniors Housing & Care. The organization says that an industrywide investment of $400 billion will be necessary to complete the required new development to meet the anticipated need.
Data Centers
5.3 Gigawatts
The data center capacity under construction in primary and secondary markets — “enough energy to power all the households in the San Francisco metro area for one year” — as noted in JLL’s H2 2023 North American Data Center Report.
Future NAIOP Events
For the most current information on upcoming NAIOP events, both virtual and in-person, visit naiop.org/Events-and-Sponsorship/ |
