Commercial Investment Real Estate Winter 2020 | Page 11

CIREMAGAZINE.COM
The self-storage sector has
attracted increased interest
from institutional investors.
Their share of volume has
jumped to 31 percent in the
12 months prior 2Q2019, up
11 percent from the prior year,
according to Real Capital An-
alytics. Northern New Jersey
topped the list of markets in
construction activity, $294
million in the year through
2Q2019. New York ($262
million), Orlando ($199 mil-
lion), and Dallas ($190 mil-
lion) rounded out the top four
U.S. locations.
Measuring
acquisi-
tion activity, Detroit topped
the major urban markets
with $391 million in the year
through 2Q2019, following by
Houston ($362 million), New
York ($287 million), and Bos-
ton ($263 million). The total
sales volume reached $1.8
billion in 2Q2019, buoyed by
a 44 percent increase in sales
activity from the year prior.
MASS RETAILERS IN STORE
FOR BIG GROWTH?
The 2018 Agriculture Im-
provement Act opened the
door for nationwide indus-
trial hemp production. Ac-
cording to the Realtors Land
Institute, the hemp market is
currently worth $620 million,
but that value could balloon
to $5 billion in the next two
years. Commodity prices for
traditional crops have dipped
to 30-year lows, increasing
interest in hemp from the
agriculture industry. Of the
78,000 acres of hemp grown
in the U.S. in 2018, most was
grown for CBD (70 percent),
with grain (10 percent), fiber
(10 percent), and other uses or
crop loss (10 percent) round-
ing out the uses.
No longer listed on the
federal government’s official
list of controlled substances,
hemp and its producers can
now be supported by agricul-
tural grants, crop insurance,
and access to the national
banking system.
DEVELOPMENTS AIM
TO MIX CITY, SUBURBAN
lillisphotography
NEW JERSEY TOPS LIST OF
SELF-STORAGE MARKETS
HEMP MARKET TO BOOM IN
NEXT 5 YEARS
If “hipsturbia” doesn’t mean
much now, it could soon be
a buzzword, according to
“Emerging Trends in Real
Estate” from ULI and PwC.
The neologism refers to devel-
opments that mix appealing
elements of suburbia — af-
fordable mortgages and qual-
ity schools — with downtown
amenities. The ULI/PwC
report covers three examples:
• Santa Clara, Calif., an-
nounced a 240-acre mixed-
use
development
with
office, retail, multifamily,
and recreation options near
public transportation.
• Northwestern University at-
tracts young adults to Evan-
ston, Ill., with access to Lake
Michigan and downtown
Chicago, and plentiful bar/
restaurant options.
• Tempe, Ariz., similarly com-
bines transit access with cof-
fee shops, sit-down restau-
rants, brew pubs, retail, and
24/7 entertainment.
Brick-and-mortar retail has
potential for growth in the
coming years, according to
an October 2019 report from
the International Council of
Shopping Centers. But mass
merchandise retailers such as
Target will be the biggest win-
ners in the next five years, with
sales growth of 12.7 percent
compounded annual growth
rate — much higher than su­
permarket, convenience, and
discount stores, which all fall
below the 6 percent average
increase in sales.
Edge by Ascential’s
2019 Store of the Future
Benchmarking study found
that 26 leading retailers ex-
celled in presenting a curated
shopping experience, while
they struggled in offering
frictionless transactions and
experiential characteristics.
But for many convenience
and discount stores, experi-
ential initiatives are not pri-
oritized because they result in
minimal improvements.
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