Filtered by Subscriptions: US Commercial Property Use setting US Commercial Property
Physical retail demand has not only been shaped by online shopping, but also by shifting working patterns which have redistributed where we spend our money since COVID-19. Nevertheless, we expect a more even retail performance with the worst-hit …
26th March 2025
Despite numerous reports of firms rowing back on remote work, the evidence in the UK, US and the EU suggests that the share of jobs being done remotely has remained constant over the past couple of years. Admittedly, that may reflect relatively tight …
20th March 2025
The latest PREA consensus forecasts reveal a downward revision in total returns and capital value changes across most sectors, especially for offices and industrial. However, the consensus remains more optimistic than our projections. That said, the …
18th March 2025
Five years ago, we were downbeat about the immediate prospects for the largest city real estate markets, the so-called gateways, and that view has proved correct. But we also argued that this malaise would be short lived and strong fundamentals would be …
5th March 2025
The ‘race for space’ following the pandemic and shift to remote work is evident in both the UK and US, with houses becoming more expensive relative to flats. And that premium for larger homes looks set to endure. While there may be a further small …
4th March 2025
The events of the past two weeks have called into question whether the US is severing ties not just with adversaries such as China but also allies, including Canada, Mexico and the European Union. This would radically alter the shape of the fractured …
Our updated analysis of the most attractive apartment markets for remote workers sees Austin nudge Nashville into second place after two years at the top of the table, with San Antonio climbing to third. On the other hand, Tampa fell from fourth to …
3rd March 2025
Industrial property has been a clear winner over the past five years, with double-digit annual rental growth far outpacing expectations. However, as we predicted early on, supply has been responsive and, combined with a normalisation in demand, those …
25th February 2025
Hotels have seen a considerable turnaround in the past five years given the near-existential threat that the pandemic posed to the sector. Having bottomed last year, we expect values will grow in the coming years, with a pick-up in consumer spending …
20th February 2025
It may seem odd that tech firms are likely to make further layoffs in 2025, while at the same time being one of the leading sectors for hiring intentions. But this broadly reflects cutbacks in less profitable areas to free up capital to invest in …
19th February 2025
Five years ago, the retail sector was staring at the abyss, as lockdowns and virus-related restrictions worsened what was already a crisis in demand. The turnaround since has been dramatic. But while the sector has now re-priced and is set to perform …
12th February 2025
While 2024 was the first year in which inventory removals outpaced completions, we expect strong conversions activity to make it the first of many. Indeed, thanks to further declines in office occupancy and capital values over 2025-2030, we expect US …
10th February 2025
Even if mortgage rates drop back slightly and house price growth cools over the next few years as we expect, renting will remain the more cost-effective option, supporting apartment demand. Southeast and West Coast apartment markets stand to gain the …
6th February 2025
This is the first in a series of pieces that revisit our pandemic-era forecasts about the future of global real estate markets and cities and explore how they will evolve in the coming years. This dedicated page highlights key analysis from our earlier …
5th February 2025
The Q4 RICS commercial property survey saw investment sentiment turn positive for the first time since 2022 and a shift in perceptions of cycle phase, with the majority now believing we have reached the bottom or already in an early upturn. At the sector …
30th January 2025
The Q4 data suggest that appraisals are lagging the market correction, with transaction-based cap rates still significantly above those reported in the indices. Our expectation that this gap closes in 2025 underpins our below-consensus forecasts for …
27th January 2025
The first week of the new Trump administration hasn’t thrown up any huge surprises in terms of policy announcements. But there remains considerable uncertainty about the impact of those policies and others mooted on commercial real estate. In this note we …
24th January 2025
Renewed rises in market interest rates across the UK, US and euro-zone have prompted questions about the implications for real estate. For now, we think the upside risk to property yields is small. We still anticipate government bond yields to fall back …
23rd January 2025
While commercial real estate insurance premiums remain elevated, their growth dropped back substantially last year. But as the West and Gulf coasts still face the greatest threat from climate risks, we expect continued rapid premium growth in those …
13th January 2025
Whilst Donald Trump is threatening to slam the brakes on the green transition in the US, state-level officials have the tools to continue making progress on the climate front. This Update uses our Regional Climate Databank to highlight the extreme …
9th January 2025
Though we think the market has bottomed, we expect a very weak recovery this year, unlike in other cycles. In fact, we think valuation falls still have further to go, leaving our forecasts generally below consensus, particularly for the industrial sector. …
7th January 2025
2024 was another difficult year for commercial real estate. Although the sector appears to have fared better than we expected, our key calls were broadly right in terms of direction and winners and losers. This time last year we outlined five key calls …
2nd January 2025
The peak in new apartment supply has passed, with completions set to drop back sharply over the next few years. If demand continues to hold up well as we expect, this should put downward pressure on the vacancy rate and support a modest pick-up in rent …
10th December 2024
A vast share of our clients highlighted geopolitics and/or Trump as their biggest blind spots going into 2025 when polled at our recent London roundtables. Meanwhile, a large majority thought that interest rates will be the key driver of returns next …
9th December 2024
Our expectation of rising evidence of distressed assets in 2024 has come to bear, but we think more is still to come over the next couple of years. Some of that will stem from matured loans requiring refinancing, which have already hit an all-time high in …
5th December 2024
Tight supply conditions will drive a solid rent outlook for the student housing sector over the next year. But the bigger picture remains one of slowing demand as steady declines in the college-age population and curbs on immigration provide a substantial …
3rd December 2024
We held an online session on US import tariffs on 26th November. (See a recording here ). In this Update we answer the questions we were most asked. What are Trump’s motives for threatening tariffs and will he follow through? Trump has spoken about using …
29th November 2024
President-elect Donald Trump’s first threatened tariffs since the election are designed to extract concessions on drug trafficking and illegal border crossings, which means it may be possible for the countries targeted – Canada, Mexico and China – to head …
26th November 2024
Retail has suffered some severe blows over the last decade, but the nadir for the sector seems to have passed and for some time we have been talking about recovery ahead, albeit a weak one. In this note, we extend our analysis to the largest US city …
20th November 2024
It is increasingly clear to us that pricing in all three regions we forecast has bottomed, even if appraisals are yet to reflect that in mainland Europe and the US. And although we expect recent events – the election of Donald Trump and the recent UK …
14th November 2024
While Trump has vowed to lower mortgage rates to 3%, we expect the net effect of his policies to have the opposite effect, keeping borrowing costs higher for longer. With that in mind, we are changing our home sales forecast to show a shallower and later …
Residential’s growing share of investor portfolios speaks to the buzz around its potential to keep providing outsized returns. But will the sector continue to deliver? Join our Commercial Real Estate team for a special online briefing all about the …
31st October 2024
The NCREIF Q3 index posted a positive return for the first time in two years, with only offices recording a negative outturn. But with firmer evidence that poorly capitalized banks have been less likely to mark loans as non-performing, as well as …
28th October 2024
The strong recovery in property equities prices across the UK, euro-zone and US implies larger rises in commercial property capital values by the end of the year than we are currently forecasting. However, property equities have been boosted by the …
22nd October 2024
Alternatives have grown in importance in portfolios in recent years and structural drivers including AI, an aging population and poor housing affordability point to further growth in occupier demand for these assets. With investors increasingly looking …
Upward revisions by the ULI consensus mean our forecasts remain more downbeat over the next couple of years. However, this is largely down to our weaker view on industrial, while our forecasts for the other sectors are more optimistic, particularly for …
21st October 2024
Industrial’s shift toward logistics means consumer-focused economic variables have become important drivers of rental growth. Admittedly, employment growth is set to slow. But a combination of relatively solid consumer spending growth, rising online sales …
15th October 2024
On the back of client questions, we have put together this short primer on the potential impact of a second Trump term on commercial real estate markets, both in the US and elsewhere. The key takeaway is that if Trump were to follow through on his mooted …
7th October 2024
While we have been talking up the prospects for retail, malls remain the underperforming subsector in our forecasts. But that covers a wide range of likely performance. Indeed, as luxury retailers expand to class A malls while anchors shutter stores in …
3rd October 2024
The flex industrial subsector outperformed most other property types over the last cycle. Its underlying characteristics mean demand and returns will continue to be healthy ahead, though the winning metros are likely to remain those closest to clusters of …
25th September 2024
We doubt the announcement by Amazon that it is requiring office-based workers to return full-time marks the start of a reversal in the remote work share. It is far from clear that requiring five days a week in the office raises worker productivity and it …
18th September 2024
The dynamism of the industrial sector means that market-level outperformance is often only achievable for short periods, because either relative value deteriorates or new supply quickly completes. Houston could be the latest example of that, with recent …
4th September 2024
While the headline-hitting surge in immigration last year was mainly driven by a spike in unauthorized movement, legal immigration has picked up from its pandemic lows, which is good news for many multifamily markets across the US. With top destinations …
3rd September 2024
Our fair value analysis suggests that appraisal-based NOI yields need to rise by 50-60 bps from Q2 levels. But downgrades to our expectations for Treasury yields in the latter years of our forecast horizon mean the cyclical peak in yields implied by this …
27th August 2024
After an already-tough H1 for information sector jobs, we expect the second half of the year to see further cuts, which will be bad news for tech-heavy metros in the West. But a more diverse occupier base and much more pronounced return to the office in …
8th August 2024
While the UK led the recovery in investment activity in Q4 last year, the latest data suggest the US and euro-zone are now also turning a corner. But given concerns over economic growth in all three markets alongside structurally higher long-term rates, …
6th August 2024
The rise in severe weather events over the last five years has left property insurers scrambling to price-in physical risks, causing premium growth to reach a 20-year high. While we think the worst is over, growth will likely remain above the historic …
31st July 2024
A second consecutive reduction in the size of value falls – just 1.4% q/q – in the Q2 NCREIF NPI appears to point to the price correction being all but over. However, with evidence of distress growing and larger price falls reported in other indices, we …
29th July 2024
While headline balances saw little movement, digging deeper the Q2 RICS survey shows a reversal of last quarter’s more positive outlook. Indeed, respondents seem more downbeat, with almost half now believing we are still in the downturn phase of the …
25th July 2024
With the share of non-performing CMBS loans on the rise, and plenty of loans set to refinance onto a higher rate this year, recent data provide further evidence that distress will rise both this year and next as we expected. However, while there is still …
18th July 2024
