Commercial Investment Real Estate May/June 2017 | Page 10

MARKET
TRENDS
How Experiences in Retail
Locations Boost Visits
Generational Differences
Younger
Millennials
(18-29) Older
Millennials
(30-34) Free Samples 57% 68% 64% 57%
Product Demos 20 19 27 28
Holiday Events 26 22 22 15
In-Store Classes 24 17 14 15
Celebrity Visits 19 22 11 8
Book Signings 14 12 9 8
Retail Experiences
Gen-Xers
(35-49)
Boomers
(50-69)
Industrial Rents
Reach Highest Peak
Since 2007*
Availability Rate 8.2%
Vacancy Rate
4.9%
Net Asking Rent $6.58 psf
Net Absorption 47.0 msf
Completions
44.7 msf
Æ
È
Ç
È
È
* Arrows indicate change from previous quarter
Source: CBRE
Source: Coldwell Banker Commercial
Briefl y Noted
Hospitality — The
southern U.S. is leading
demand for hotel rooms
with 2.3 percent growth
YOY, with occupancy
levels at 60.7 percent in
the fourth quarter of 2016.
Of all hotel categories,
upscale hotels performed
the best, rising 5.1 percent
YOY in the fourth quarter
of 2016, according to
CBRE Research.
Industrial — The U.S.
industrial markets con-
tinue to soar and become
absorbed at a record-
breaking 282.9 msf during
2016, according to Cush-
man & Wakefi eld. As of
January 2017, the indus-
trial sector has recorded
8
May | June 2017
27 consecutive quarters
of net occupancy gains,
ranking this expansion
among the longest cycles
ever. “An optimistic U.S.
consumer will be a boon
to industrial leasing,” says
Jason Tolliver, Cushman &
Wakefi eld head of industrial
research for the Americas.
“Containerized traffi c fl ows,
manufacturing indices,
and business inventories
demonstrate that the indus-
trial market remains on a
promising path.”
Multifamily — 2017 will
be the biggest year for
new supply of apartments
since the Great Recession,
according to Yardi Matrix.
The 320,000 new units
will mark a 5.3 percent
increase compared to 2016
and could be the peak
supply for this cycle. Yet
millennials keep driving
demand for living in city
centers with 18-hour
lifestyle and access to
public transportation,
and 2 million more
millennials are arriving
every year until their total
number reaches nearly 70
million by 2024.
0ffi ce — Despite overall
lower investment volume
in 2016, the offi ce sector
reached $143 billion of
full-year transactions,
for a slight dip of 0.6
percent compared to
2015, according to JLL.
International investors
poured $20 billion into
offi ce properties for a
record 16-percent market
share. Investment from
Germany topped the list at
19.3 percent, followed by
Canada at 12.9 percent,
and China at 10.4 percent.
Retail — Entertainment
and multisensory
experiences are the keys
to driving millennials to
reimagined shopping malls.
Commercial real estate
professionals can rethink
what shoppers experience
at malls by reimagining
public spaces as a
canvas for entertainment,
according to McKinsey &
Company.
COMMERCIAL INVESTMENT REAL ESTATE