CCIM Feature
Market Analyst
As
the inventory of quality assets in top-tier
markets began to shrink this year, investors turned their attention to
secondary and tertiary markets. “This robust interest marked a turning point
for commercial real estate,” says George Ratiu, director of quantitative and
commercial research for the National Association of Realtors. Markets such as
Seattle, Austin, Texas, and Jacksonville, Fla., continue to lure hungry
investors.
“These smaller markets offer higher yields, and in the
case of technology, energy, or intermodal transportation centers, significant
upside potential,” Ratiu says. “As the diversification and availability of
capital sources continue into 2014, midsize and smaller markets are well
positioned to ride the rising tide of commercial transactions.”
Ratiu has seen a wide range of economic and commercial
real estate activity during his career. With experience analyzing Eastern
European countries’ integration into the European Union and its effects on
commercial properties, Ratiu brings a global perspective to his role at NAR.
“In Washington, D.C., I’ve had a front-row seat for the 2008 financial crisis,
the ensuing global recession, and the arduous economic and commercial real
estate market recovery,” he says.
As 2014 gets underway, Ratiu expects employment to
remain the No. 1 concern for commercial real estate’s continued growth. “A
large portion of the population remains under or unemployed,” he says. “Add
stagnant or declining real wages, and we can see why vacancies for office and
retail properties remain at double digits.”
On the upside, a strengthening housing market and
gains in the financial markets have boosted consumers’ “wealth effect,” Ratiu
notes. Increased consumer spending, reduced consumer debt, and widening credit
availability are contributing factors that translate into positive news for
commercial real estate. “With interest rates expected to
remain relatively stable next year, commercial markets should experience
improved fundamentals and continuing investment opportunities,” he says.