Commercial Investment Real Estate March/April 2019

2019: What’s Ahead in Pricing? A Growing Movement? Calling real estate fundamentals “generally solid,” John Oharenko, direc- tor of the Real Estate Capital Institute, a volunteer-based organization that tracks realty rates data for debt and equity yields, notes pricing trends to watch in 2019. Agrihoods are a new trend in community planning. The residential or mixed-use developments are built around a working farm or community garden. Urban Land Institute notes that agrihoods show promise thanks to an increased focus on health and social interaction, as well as aware- ness of environmental benefits of local food sources. The projects also can have a good return on investment, ULI reports, because of their proximity to parks and open space and can be less expensive to build and operate than other amenities such as golf courses. Projects are underway in 27 U.S. states and Canadian provinces. Suburban Rebounds Suburban properties will attract buyer interest due to larger pricing gaps. Higher Rates Markets gradually will reprice assets as the cost of borrowing rises. Price Discovery As more buyers look for well-priced stocks and bonds, pricing discovery will increase. Fewer buyers at the table means lower prices. Source: Urban Land Institute, “Agrihoods: Cultivating Best Practices” ‘Spa’ Was Not an Option Office building amenities important to commercial real estate professionals may not reflect what’s important to tenants. A recent survey by Building Engines, a property management software provider, revealed the differences. Ranking Building Occupants CRE Professionals 1 Public Wi-Fi Cafe or restaurant 2 Gym Meeting and event space 3 Cafe or restaurant Coffee shop 4 Coffee shop Public Wi-Fi 5 Meeting and event space Gym 6 Lobby lounge or seating area Lobby lounge or seating area Most Important Building Amenities Source: Building Engines, “The Tenant Experience Gap: Building Managers and Tenants Look at the Future Through Different Eyes” CIREMAGAZINE.COM March | April 2019 7

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