Market Trends

Safety at Work

In a recent survey of occupants of more than 600 multi-tenanted commercial buildings in the U.S., 81 percent said they feel secure in their workplace, while 32 percent said their security concerns have increased because of recent events. Most buildings had safety and security procedures in place for physical threats, but far fewer had procedures for cybersecurity issues. 

A quarter of respondents said that they planned a significant increase in cyber-security spending in the next two years, and  37 percent said they planned to increase physical security spending.

Source: Building Engines, “The Tenant Experience Gap: Building Managers and Tenants Look at the Future Through Different Eyes”

+++

Beacons for Growth

Beacon and sensor technologies are currently utilized  in commercial properties for inventory, security, and space utilization, among other uses. But according to a recent NAIOP Research Foundation report, these technologies “are no longer used only for single purposes (e.g., motion sensors turning lights on in a conference room) but are increasingly linked through internet-based networks.” These networks can offer more comprehensive information about a property — and can increase profit — but the data they collect can raise privacy and security issues. The report, “Beacons and Sensors in Commercial Real Estate,” notes several technologies used in CRE settings, including radio-frequency identification, geofencing, beacon technology, and WELL and RESET sensors. Uses included work site monitoring and security, measuring retail consumer behavior, and interior environmental monitoring.

Source: Yardi Matrix

+++

Hotel Deals Up in 2018

Performance metrics for major U.S. hotel deals ended 2018 on a high note note. LW Hospitality Advisors 2018 Major U.S. Hotel Sales Survey tracked 208 single-asset deals over $10 million, none of which were part of a portfolio. Among the findings:

 

+++

YoY Multifamily Rents Up

While overall U.S. multifamily rents remained flat in 2018 at $1,420 a month, year-over-year growth was 3.3 percent, up 10 basis points — matching the highest rent growth since November 2016. Top markets for growth include:

 

Source: JLL

+++

Rising Absorption for Industrial Sector  

Cushman & Wakefield’s 2019 North American Industrial  Outlook predicts a healthy 495 msf of North American industrial absorption in 2019-2020, with 245 msf for the U.S. in 2019 and low- to mid-200 msf in 2020.

+++

CRE Use of Proptech Practices

Source: Altus Group, “The Innovation Opportunity in Commercial Real Estate: A Shift in PropTech Adoption and Investment”

+++

A Growing Movement?  

Agrihoods are a new trend in community planning. The residential or mixed-use developments are built around a working farm or community garden. The Urban Land Institute notes that agrihoods show promise thanks to an increased focus on health and social interaction, as well as awareness of environmental benefits of local food sources. The projects also can have a good return on investment, ULI reports, because of their proximity to parks and open space and can be less expensive to build and operate than other amenities such as golf courses. Projects are underway in 27 U.S. states and Canadian provinces.

Source: Urban Land Institute, “Agrihoods: Cultivating Best Practices”

+++

Big Box Median Asking Cap Rate by Region: 4Q2018

+++

Briefly Noted

Hospitality: Speakers at the Americas Lodging Investment Summit in January noted that hotel groups are beginning to reduce sub-branding to cut costs and sharpen their focus on the customer experience. GlobeSt.com  reports that hotels with four or five brands in the same market segment have seen revenues decrease. “If you look at success of every major hotel, there was one brand per segment, and it was laser-focused on the demographic,” the Radisson Hotel Group’s Ken Greene told a panel. “There wasn’t all this blending.”

Multifamily: Now that coworking has established itself in the U.S. market, co-living may be the next big thing. These spaces are smaller than traditional apartments and share kitchens, bathrooms, and other common areas. One high-rise apartment building in Queens, New York, operates 169 co-living suites out of 466 apartments. The CEO of the company managing the apartments told the National Real Estate Investor that 73 percent of the units are occupied with leases from $1,260 to $2,200 per month.

Mixed-Use: Developers of mixed-use projects are taking note of the rising popularity of food halls. The halls — most commonly developed in urban markets — are collections of local, specialized restaurants under one roof. The restaurants feature a variety of cuisines, including ethnic, local, and healthy-eating choices. There are currently about 180 in the U.S., says Northeast Real Estate Business, citing Cushman & Wakefield statistics, but there could be more than 300 by the end of next year. Developments with halls also can attract office and retail tenants, as well as foot traffic from nearby offices. “When it connects right, a food hall can transform a project,” one CRE executive said.

Advertise with Us

Reach more than 45,000 top-performing commercial real estate professionals with CIRE magazine’s print, podcast, and online offerings.

Download the Media Kit

CIRE May/June 19 Cover