Commercial Investment Real Estate November/December 2018 | Page 10

MARKET
TRENDS
Top Commercial and Multifamily Construction Starts
Increase
Over 1H2017
New York Metro $16.1 44%
Washington, D.C. $5.0 23%
Miami $4.9 34%
Boston $3.7 56%
Seattle $3.2 7%
Market Construction
Start Volume
1H2018 (in billions)
Source: Dodge Data & Analytics
Briefly Noted
Industrial — Demand
for lab space rose sharply
and should continue
to grow, thanks to a
combination of new
technology, venture
capital research funding,
and an aging population,
according to CBRE’s
2018 U.S. Life Science
Report. The report notes
that employment in the
life sciences sector rose
13.5 percent between
2006 and 2016, compared
to 6.9 percent overall
U.S. employment. Life
sciences companies “are
converging on markets
with concentrations of
scientific talent, amid
deep-seated growth
drivers and industry
disruption,” and rents
for lab space in premier
markets like Cambridge,
Mass., have increased
8
November | December 2018
more than 50 percent in
the last three years.
Hospitality/Multifamily
— Pop-up hotels are
coming to a city near
you. Lodging service
WhyHotel opened facilities
in Baltimore and planned
to open another in October
in Washington, D.C.
WhyHotel books empty
units in newly-built luxury
apartment buildings during
their lease-up phase;
guests stay in furnished
apartments of varying
sizes and can use building
amenities. USA Today
reports that the first
WhyHotel popup in D.C.
— which was open for
five months — comprised
50 units out of a 699-unit
building; after 60 days, the
pop-up occupancy rate
jumped to 85 – 90 percent.
Office — More than 200
U.S. coworking companies
are operating at least
one 5,000-sf location,
according to Cushman
& Wakefield. In its recent
Coworking and Flexible
Office Space report, the
company says that 50
percent of all current U.S.
coworking space has
opened since 2015. The
largest player: WeWork,
which in the first half of
2018 accounted for eight
times as much newly
leased space as the other
nine largest companies
combined. The company
is now the largest tenant
in Manhattan at 5.3 mil-
lion sf, according to The
Wall Street Journal. While
coworking space only
accounts for 1 percent
of total office inventory,
Cushman & Wakefield
predicts that in the near
future it could represent
between 5 percent and 10
percent in some markets.
Retail — Looking to
fill empty space, mall
operators are opening
retail incubators in
vacated stores, reports
CoStar. The incubators
give startups the
opportunity to test retail
concepts, offer variety
to mall visitors, and give
operators a chance to
spot new tenants with
growth potential. In a
related move, REIT leader
Macerich has partnered
with coworking company
Industrious to operate
coworking spaces in some
Macerich properties; the
first location will open in
January at Scottsdale,
Ariz., Fashion Square.
COMMERCIAL INVESTMENT REAL ESTATE