Market Trends

Driverless Trucks Affect Last-Mile Delivery

While driverless trucks cannot manage doorstep delivery of packages soon, they may deliver parcels to fixed loading stations. Also, driverless trucks may act as mobile outposts, available for package delivery and pick up at certain locations at specific times of day.


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Showing the Money: Cities Are King

“The world's most economically successful cities house just 13 percent of the world's population, but attract more than 67 percent of global real estate investment flows.”

- Winning in Growth Cities: A Cushman & Wakefield Global Capital Markets Report


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Where Medical Office Is Heading

  • By 2030, the 65+ population will rise by more than 20 million people and comprise over 20 percent of the U.S. population. Demand for medical providers will increase.
  • Millennials primarily rely on retail clinics, urgent care centers, and free-standing emergency rooms for their healthcare options.
  • Underserved rural populations are gaining better medical care through telehealth services.
  • Healthcare providers continue to push into communities by leasing space outside of traditional hospital campuses. Micro hospitals also are an emerging trend, especially for underserved populations.

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Briefly Noted 

Hospitality — Hotel occupancy is expected to continue soaring to record levels of 65.9 percent nationally through 2019,  marking 10 years of nonstop growth, according to CBRE. However, challenges on the horizon consist of increased hotel construction in local markets, low inflation, the sharing economy, and book-direct, best-price guarantees for hotel rooms. Countering these headwinds, international and domestic travel rose 3.8 percent during 2016, increasing the demand for hotel rooms and contributing to the demand outpacing supply, according to Marcus & Millichap. Norfolk-Virginia Beach, Va.; Orlando, Fla.; and Atlanta experienced high increases in demand for hotel rooms.

Industrial — Three trends are spurring growth in the industrial sector: low, steady vacancy at 5.2 percent nationwide; strong pre-leasing of 54.2 percent; and the strength of e-commerce, which commands 25 percent of leasing demand. The U.S. absorbed nearly 165.6 million square feet of new industrial properties YOY, while nearly 221.2 msf of new inventory is in the pipeline, according to JLL. Pressure continues for faster shipments and lower costs for consumers, resulting in companies investing in locations that are closer to labor and their customers.

Multifamily — Consistent good performance is the mantra of the multifamily sector for 2018. Yardi Matrix predicts multifamily will continue its long run, buoyed by the strong economy and job growth; the shift to renting property by many baby boomers; and the continued support by millennials. Hurricanes Irma and Harvey helped to readjust the supply and demand equation for multifamily, particularly in Houston.

Office — As large, multinational companies spread globally, more firms will rise from emerging economies. By 2025, more than 45 percent of the Fortune Global 500 will come from emerging economies, compared to 5 percent in 1990, according to Cushman & Wakefield. The technology sector is creating a new generation of companies that could compete in more diverse locations in secondary markets, such as Seoul, South Korea; Stockholm; and Austin, Texas. The total revenue  for the tech sector grew  from $600 billion to more than $6 trillion over three decades, resulting in a  new crop of firms.

Retail — As retail  continues its marketplace transition, the top 90 U.S. shopping centers have spent billions of dollars to renovate their space, captivating shoppers with more food and fun; community connections; and stronger curb appeal. More than 41 percent have upgraded their food and beverage offerings; 34.4 percent have renovated tenant space; and nearly 30 percent  have boosted entertainment, according to JLL.

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CIRE March/April 2018 Issue Cover