Market Data

Market Trends

Momentum Still Strong for Retail Bargain Hunters

“With the growth of e-commerce, consumers have become increasingly price-aware and are now accustomed to the convenience and immediacy of online shopping, and brick-and-mortar retailers have been challenged to find ways to get those customers out of the comfort of their computer chairs and back into the store. Off-price retailers such as Nordstrom Rack and TJX Companies have proven to be somewhat immune to the threat of e-commerce because they offer customers a rapidly changing inventory of designer-quality products at significant discounts that cannot be easily found online, which gives these price-savvy customers the reward of a successful bargain hunt.”

- Bob Smietana, CEO of HSA Commercial


Economy to Continue Brisk Pace

“Most of the signals we are seeing in the market and hearing from our clients indicate that we aren't nearing the end of the current real estate cycle just yet. The economy is healthy, with strong access to financing and capital, and real estate fundamentals are strong.”

- Greg Williams, KPMG National Sector Leader


Briefly 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 continue to soar and become absorbed at a record-breaking 282.9 msf during 2016, according to Cushman & Wakefield. As of January 2017, the industrial sector has recorded 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 & Wakefield head of industrial research for the Americas. “Containerized traffic flows, manufacturing indices, and business inventories demonstrate that the industrial 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.

0ffice — Despite overall lower investment volume in 2016, the office 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 office 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.

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Regional Outlook


Houston's office market may rise again. | Top 5 multifamily markets with the highest 2017 expected completions and absorption. | Low office vacancy rates in Boston. | Industrial markets in California and Miami are strong | Hotel market grows in Charlotte, N.C.

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Mixed Signals


Commercial real estate financing is still relatively cheap and fairly accessible, but there is room for volatility. With a Trump administration, the Brexit vote, and an increasing 10-year Treasury Note rate, a lot can change in the commercial real estate lending in the coming months.

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International Beat


CIRE Magazine (Jan/Feb 2017): A look at the latest in commercial real estate industry around the globe.

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Regional Outlook


Investment is booming in San Francisco | Uber and Lyft ride sharing affects CRE sector | Nashville hotel rates grow with increase in tourism | Low oil prices and bigger business profits | Construction in Chicago is big | Boston's warehouses drive vibrant industrial market | Twin Cities multi-tenant market fundamentals continue improvement

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