Commercial Investment Real Estate September/October 2018 | Page 9

Work Trends Drive Shift to
Lower-Cost Cities
Because of escalating rents, many multinational corporations
are looking to decentralize to areas with lower costs. The rise of
technology firms has made a difference as well; newer compa-
nies no longer feel obligated to locate in traditional — and more
expensive — power cities, particularly if many of their employees
work remotely.
Industrial Property
Sale-Leaseback
Options on the Rise
Cost to Locate 100 Workers
in Hong Kong Equals
Companies that own and occupy industrial space are
becoming more interested in sale-leaseback options,
thanks to three factors.
1. The growth of e-commerce has increased demand for
industrial space, driving down vacancy rates to record lows.
2. Industrial property values have risen, so property owners
have access to higher profits that they can reinvest back
into the business.
occupied businesses, including 100 percent depreciation
of certain assets over a year.
Source: Marcus & Millichap Industrial Spotlight
3. The new tax code contains favorable rules for owner-
300 Workers
in Toronto
500 Workers
in Madrid
900 Workers
in Mumbai
Source: “Disruptive Office Trends in 2018,” Cushman & Wakefield
Top Five U.S. Hotel Development Markets
Number of New Rooms Under Construction
1
4
2
Denver
4,100 rooms
Las Vegas
7,400 rooms
3
5
New York
11,000 rooms
Nashville, Tenn.
3,500 rooms
Dallas
5,300 rooms
Source: National Real Estate Investor
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