Market Data

Market Trends in Commercial Real Estate

Retailers on the Rise

Supermarket chains dominated the top spots on STORES magazine's 2019 Hot 100 Retailers list of the fastest-growing retail companies in the U.S. The magazine ranked companies based on increases in domestic sales between 2017 and 2018. All retail companies with more than $300 million in domestic sales are eligible. Here are the top 10: 

U.S. Sales Growth Between 2017-2018

 Lidl  295%
 Rue Gilt Groupe  137%
 Grupo Comercial Chedraui  119%
 Don Quijote  81%
 Boxed.com  77%
 Wayfair  42%
 Primark  40%
 At Home Stores  23%
 AT&T   23%
Five Below   22$

Don't Fear the Future

News reports of cybersecurity breaches, automation, and artificial intelligence can cause anxiety. But business leaders can prepare for potential disruptors and take steps to minimize the speed bumps.

Today, 37 percent of business leaders worry if their businesses are vulnerable to digital disruption - up 5 percent from two years ago, according to the 2019 PwC family business survey.

The primary technological challenges that keep folks up at night? Respondents tabbed digitization (44 percent), cybersecurity (39 percent), and robotics and AI (22 percent) as the biggest concerns.

Source: PwC   


Sweet Deal for Coca-Cola Building

Less than a month after acquiring an 18-story building in Manhattan for $909 million, Nightingale Properties and Wafra Capital Partners sold it for $955 million. The historic Coca-Cola building, located at Fifth Avenue and 55th Street, includes a mix of office and retail space.   

Source: Bloomberg 


Healthy Outlook for IRFs

Inpatient rehabilitation facilities (IRFs) are the fastest-growing area of post-acute care (PAC) facilities, says Colliers International. In its Healthcare Service: Summer 2019 research report, Colliers notes that of the 117 freestanding PAC facilities built between 2015 and 2018, 62 - more than half - were IRFs. Eighteen more - with 910,000 sf - are due for delivery this year at a cost of $426 million. Colliers points out IRFs “tend to have a healthy operating margin” and are attractive to investors because they offer lower-cost care settings.  


Rent's Up: Apartment Demand Rises in 2Q

Apartment demand in the U.S. accelerated in 2Q2019. Net move-ins, totaling 155,515, rose to a five-year high, beating 2Q2018 absorption by 11 percent. Here are the top markets in demand: 

   Quarterly Demand (units) Quarterly Completions (units) 
 Dallas-Fort Worth  10,443 6,441 
 Chicago 7,418  2,617 
 Houston 6,969  2,373 
 New York 6,59  2,768 
 Washington, D.C. 6,008  2,768 

Source:  RealPage


Global Cities


Caps for QSR


Briefly Noted

Hospitality: A recent Urban Land Institute report noted that the hospitality sector spends an average of $2,196 per guest room and 6 percent of total operating costs on energy each year, totaling $7 billion annually. Steps to improve sustainability in water, energy, waste, and land usage can generate immediate returns, but ULI's Sustainability in Hotels: Opportunities and Trends Shaping the Future of Hospitality, notes “much of the hotel industry is leaving valuable operational and technical opportunities for savings and efficiency on the table.” The report describes current methods that hotel owners and developers can use - whether building new or retrofitting - and reports on future trends, including materials selection, modular construction, and technology updates. 

Land Use: You already know about pop-up stores, but GlobeSt.com notes a new concept: pop-up parks. Globe St. defines the parks as “instant open area[s] ready for public use and programming,” but municipalities and developers across the country are interpreting the concept in a variety of ways. Some are temporary spaces used for events and programs during a construction project; others are used as trial balloons to gauge community response to urban land use. 

Mixed-Use: Several cities around the country now boast library-apartment complexes. Chicago, for example, has three new versions of the hybrid, including two affordable seniors buildings and a mixed-income building. “A lot of times the first floor is underutilized in a residential building,” the developer of two of the sites told the Chicago Tribune. “You'll put a mailroom and a property management office there or sometimes a fitness room. Whereas if you get a library in there, every inch of that ground floor is active and public and inviting people in.”

Multifamily: The growth of e-commerce has presented a challenge to apartment building developers and managers. As the flow of deliveries increases to apartment buildings, managers are “tasked with finding new and creative ways to meet the demand for package storage, sorting, and security,” says Rick Haughey, vice president of the National Multifamily Housing Council, to the Associated Press. Some companies, such as Amazon, offer off-site lockers for pickup; other companies have sprung up to provide on-site lockers or take delivery of packages and deliver them directly to residents. One other complaint: waste-management issues, thanks to the volume of packaging materials and boxes.

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