Market Trends

New Year, New Possibilities

Want to know the 10 markets with the best overall real estate prospects for 2019? Urban Land Institute and PwC recently named the areas below in the 40th edition of Emerging Trends in Real Estate. The firms interviewed 750 real estate professionals and surveyed an additional 1,630 on a wide variety of real estate issues and trends to arrive at the decision.

  1. Dallas-Fort Worth
  2. New York-Brooklyn
  3. Raleigh/Durham, N.C.
  4. Orlando, Fla.
  5. Nashville, Tenn.
  6. Austin, Texas
  7. Boston
  8. Denver
  9. Charlotte, N.C.
  10. Tampa/St. Petersburg, Fla.


Construction’s Digital Future

Global construction technology, or con-tech, is becoming increasingly attractive to investors, according to The State of Construction Technology, a recent JLL report. The field is ripe for growth; the report notes that the construction sector is one of the least digitized, and $1.05 billion was invested in con-tech startups in the first half of 2018. The largest number of startups focused on collaboration software, offsite construction, and project management, but others focused on areas such as financial management; 3D visualization and drones; and aerial intelligence.


Industrial Occupiers

Although e-commerce occupiers need larger buildings, the category was actually fourth in the number of 1,877 transactions for industrial properties over 100,000 sf, from October 2017-October 2018.

Source: Colliers


New Luxury Rentals on the Rise

Out of 1,600 large-scale U.S. apartment buildings constructed in 2017, 79 percent — 1,270 units — were classified as high-end properties, and by 1H2018, the percentage rose to 87 percent.


What’s Coming Up in Retail Centers?

Retail experts identified five retail-center trends to watch at Bisnow’s Mixed-Use  and Retail event in Houston this past October.

  • Specialty-focused retail destinations with mixed-use centers revolving around one theme, such as health or food
  • Downsized grocery stores, resulting from increased home grocery delivery from warehouses
  • Smaller-scale mixed use, thanks to the  rising cost and shrinking availability of urban land
  • Better understanding of Middle America’s  shopping patterns, rather than a focus on  high-end or trendy shopping habits
  • Restrictions and rules on marijuana sales or retailers, as more states legalize cannabis   


Office Absorption High in Tech Center Cities


Briefly Noted

Industrial — While the U.S. big-box market continues to grow, Colliers noted one area where developers need to be alert. Because e-commerce distribution centers have higher employee counts, as well as seasonal spikes, these occupiers “can require two to three times the amount of labor as a traditional distribution user,” the company says in its recent Big Box Market Report. This means that extra scrutiny for available labor will be necessary in the site-selection process.

Multifamily — Apartment communities across the country are incorporating more pet-friendly features into their properties; amenities include enclosed dog parks, walking trails, and even pet pools. “Closing ratios are higher than the normal apartment ratio where there are no pet amenities, and dollar for dollar, rents tend to be higher as well,” Lynn Owen, COO of TruAmerica Multifamily, told

Office — Office building parking solutions are an ongoing concern as parking costs increase and companies increasingly embrace coworking. The flexibility of coworking can make parking needs difficult to determine, says Allwork, particularly in suburban areas. While urban businesses can depend more heavily on mass transit, suburban landlords may need to explore alternatives such as carpool incentives or discounts for ride-sharing services.

Retail — A three-level, 120,000-sf athletic resort is planned to open this year in a space once occupied by a J.C. Penney store that anchored Southdale Center in Edina, Minn. CoStar reports that the project is being developed by Simon Property Group and Life Time, a Minnesota company that operates 138 fitness centers throughout the country. The resort will include a rooftop restaurant and beach club, a pool,  a cafe serving healthy fare, a spa, and a salon.

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CIRE January/February 2019 Cover