2012 Niche Investment Prospects
1. Medical office
2. Urban mixed-use
3. Data centers
5. Mixed–use town centers
Source: Emerging Trends in
Real Estate 2012 survey
Hospitality — Up to a
100-day wait for visas is keeping foreign tourists, especially those from
China, Brazil, and India, the fastest-growing and highest-spending segment of
overseas travelers, from visiting the U.S., according to HotelNewsNow.com. Based on the U.S.
Travel Association statistics, from 2000 to 2010, the U.S. share of global
travelers fell almost 5 percent.
Industrial — Weary of
fighting for office trophies, institutional investors are looking more closely
at plain-Jane warehouses, according to CoStar, which has tracked an uptick of
3Q11 big-box warehouse sales in major distribution hubs. Six quarters of positive
absorption and a 70-basis-point drop in vacancy since 2009 may signal rent
Multifamily — Buy
way you like it,”
is the advice from Emerging Trends in Real Estate 2012. Every market and class
was suggested by commercial real estate professionals interviewed, except one:
Avoid markets with an oversupply of single-family homes to rent.
Office — While demand for
medical office will certainly continue for the next decade, performance varies
considerably by market, says Marcus & Millichap.
Well-performing markets are found in Texas, the Midwest, and the Northeast.
However the Southeast, the West, and Mountain states suffer from an oversupply
of spec development built during the housing boom.
Retail — Tablets and
smartphones will completely revolutionize the shopping experience at apparel
and department stores in the next three years, according to Chainstoreage.com.
Cash registers and checkout counters will disappear as sales associates armed with
mobile devices will make sales wherever the customer happens to be. By 2015
more than 2.7 million tablets a year will be shipped for use in retail and
Bank Failures Continue
As of November, 90 banks
had failed in 2011, according to Trepp, which predicts
bank closures to continue into 2012 and beyond. Of the 11 banks that failed in October and five in November, commercial real
estate loans comprised 80.8 percent of the banks’ nonperforming loans.
real estate has already demonstrated for a solid 18 months that it can perform
reasonably well in the throes of a deleveraging recovery.” — Kevin J. Thorpe, chief
economist, Cassidy Turley