Commercial Investment Real Estate January/February 2017 | Página 10

MARKET
TRENDS
Super-Sized
Cycling
Cycling has become the fastest growing form
of transportation in the U.S. To accommodate
this trend, commercial real estate developers are
building more trails for bicycling, jogging, and
walking near high-rises in cities and suburbs,
according to the Urban Land Institute.
Briefly Noted
Hospitality — Hotel deal
volume rose 50 percent
to $85 billion worldwide in
2015, fueled by a record
proportion of cross-border
capital and single asset
transactions, according
to JLL. Through 2016,
hotel values continue
to rise with secondary
markets, which are the
focus of the majority of
investors. RevPAR is
projected to grow by
4 to 5 percent, with $37
billion in hotel deals in
the U.S., JLL says.
Industrial — Momentum
in the red-hot industrial
market declined slightly
as demand eased during
the third quarter of 2016,
8
January | February 2017
according to Reis. With this
downshift, industrial is on
par with the slowdowns in
office and retail. The out-
look on industrial, however,
remains more favorable as
the e-commerce industry
continues to evolve. Ama-
zon launched a new food
store concept in December
2016, for instance, which
will require more warehouse
and distribution space.
Multifamily — Rents
continue a steady decrease,
falling an average of $3 in
123 markets during October
2016 — the biggest drop in
three years — according
to Yardi Matrix. The two
primary factors are outsize
growth in the number of
new rental units and the
supply of high-end lifestyle
apartments that coincides
in some metro areas with a
slowing rate of job growth.
But the fundamentals
remain strong. The mar-
kets where rent growth has
dropped swiftly, such as
San Francisco, Houston,
and Denver, are experienc-
ing issues such as
oversupply, affordability,
and job growth.
Office — During 2016,
the national vacancy rate
in office has declined by
20 basis points compared
to 40 basis points in 2015,
according to Reis. Since
2015, average monthly job
growth has slowed and
GDP growth has been hesi-
tant, while the fundamen-
tals in the top 82 metros
remain constant. About 56
markets showed positive
net absorption, 48 posted
occupancy improvements,
and 72 markets reported
increases in rents.
Retail — Just 2.5 msf
of new shopping center
space appeared in the third
quarter of 2016 show-
ing that brick-and-mortar
retail space does not have
demographic advantages
of multifamily. The threat of
e-commerce has shut out
many new retail develop-
ments with the exception
of mixed-use projects,
according to Reis.
COMMERCIAL INVESTMENT REAL ESTATE