Commercial Investment Real Estate January/February 2018 | Page 10

MARKET
TRENDS
Mobile Home and Self-Storage
Deliver Sterling Performance
1Q 2014 through 3Q 2017
Mobile Home
Self-Storage
$1.0
0.6
0.4
0.2
0.0
Q1
Q2
Q3
Q4
2014
Q1
Q2
Q3
2015
Q4
Q1
Q2
Q3
Q4
2016
Q1
Q2
Q3
2017
Source: Trepp
Briefly Noted
Hospitality — The
landscape for hotels is
changing fast due to
geopolitical and economic
factors. Also, technological
disruption, millennials’
cultural expectations, and
new market players are
causing structural shifts.
JLL has identified five
groups of cities that provide
different opportunities
for hotel investors and
developers. The five groups
consist of Global Giants,
with cities such as New York
City and London; Rising
Giants, including Dubai,
United Arab Emirates,
and Shanghai; Gateways,
with cities such as San
Francisco, Singapore, and
Sydney; New World Cities,
with mid-sized cities like
Vancouver, B.C., and Dublin;
and Emerging Hotspots,
such as Bangalore, India,
8
January | February 2018
and Ho Chi Minh City,
Vietnam.
Industrial — Demand
continues to outpace
new supply for industrial
properties nationwide,
according to JLL. Year-to-
date, the U.S. delivered
161 million square feet of
new industrial property
and absorbed about 165.6
msf. During Q3 2017,
nearly 25 percent of the
total U.S. leasing demand
for industrial came from
e-commerce companies.
Vacancy rates remain steady
at 5.2 percent, and average
cost of industrial space was
$5.40 psf, an all-time high.
Multifamily — The
hurricanes in Florida and
Texas have a cost for the
multifamily sector; many
workers will migrate to
those states for rebuilding
apartments, resulting in a
slower delivery schedule
for the rest of the nation.
Despite the current long
cycle, multifamily continues
to show strength, driven
by the steady tide of
millennials and downsizing
baby boomers and
the healthy economy,
according to Yardi Matrix.
Office — Employers are
seeking office locations
near public transportation,
which offer co-working
and flexible office space
options, according to
Avison Young. Class B
buildings often are being
renovated to Class A-, while
redevelopment continues
to turn obsolete buildings
into apartments, schools,
and self-storage facilities.
The U.S. office market is
immense — about 5 billion
square feet – of which
about 3.3 bsf is located in
suburban markets.
Retail — As shopping malls
reinvent their mix of tenants
and use of space, vacancies
rose to 8.3 percent in 3Q
2017 compared to 2Q 2017,
according to Reis. With
more retailers declaring
bankruptcy or closures,
this trend will continue.
Ten retail companies filed
for bankruptcy during the
first three quarters in 2017,
which is headed toward
eclipsing the 20 retail
bankruptcies during the
2008 Great Recession,
according to AlixPartners.
Despite these headwinds,
asking rents moved up
0.4 percent, while effective
rent rose 0.5 percent,
Reis reports.
COMMERCIAL INVESTMENT REAL ESTATE
0.8