Filtered by Subscriptions: US Commercial Property Use setting US Commercial Property
There currently appears to be little economic scope for conversions to residential across the six major office markets. But our forecasts of falling values and rising vacancy in the office sector suggest the incentive will increase, particularly in NYC …
7th May 2021
Industrial has strong start to 2021; office and retail fall further behind Weakness in office and retail occupier demand weighed heavily on market sentiment in Q1. Commercial property agents are therefore downbeat about rental and capital values in these …
29th April 2021
Domestic tourism could be key to spring and summer outperformance Employment growth in the three-months to March was positive in almost all metros, but those in southern states tended to be the better performers. With Miami’s hospitality sector performing …
28th April 2021
Q1 returns point to upside risk to our forecasts, particularly for industrial All-property total returns rose again in Q1, driven by improvements in all sectors, although retail and hotel returns were again negative. But the industrial sector boom …
27th April 2021
We expect a strong recovery in TV and film-related employment will support office demand in LA over the next five years. Alongside a relatively small development pipeline and low office rents, this means we expect vacancy rises and rental value falls in …
23rd April 2021
In our recent Office and Apartment Outlooks, we identified Washington D.C. as the top performer over a five-year forecast in both sectors. Those expectations are driven by several factors influencing both supply and demand, but none of these is more …
20th April 2021
The easing of virus restrictions and return to offices for many white-collar workers will mean that apartment markets in cities such as NYC and Washington D.C. will outperform this year. But we think the longer-term outlook is most favourable in Sunbelt …
15th April 2021
Property investment volumes held up better than we anticipated in 2020, and we are expecting 2021 to be a solid year for investment. We think that pent-up demand and the reopening of the economy will help transaction volumes reach over $500bn this year, …
14th April 2021
Commercial property debt to benefit from easing restrictions Commercial real estate debt fell for the second consecutive month in March. That likely reflects weak investment activity due to virus restrictions. But, as constraints continue to ease and …
9th April 2021
Leisure & hospitality sector re-openings will drive H1 2021 outperformance Employment growth in the three-months to February was heavily influenced by the rate of virus cases and consequent restrictions in place. And office-based jobs growth is still …
7th April 2021
Overview – All major city apartment markets will benefit from the reopening of the economy and reduction in remote work, with rental demand also supported by record low numbers of homes for sale. New York City and D.C., which both saw large falls in …
1st April 2021
Overview – There are forecast downgrades across the board this quarter, owing to the changes to our occupier demand expectations at the sector level. The markets broadly split into three pairs. New York City and San Francisco could see capital values fall …
31st March 2021
Overview – The vaccine rollout and stimulus bill are unquestionably positive for the economy but may be a mixed blessing for real estate. Those two factors are probably most positive for the apartment sector, given that they have put more cash in the …
25th March 2021
Thanks to changing consumption patterns and structural and cyclical knocks to the traditional property sectors, both occupier and investor demand for data centres set new records last year. But, while further strong growth is likely, we don’t expect these …
19th March 2021
Our analysis suggests that both higher asking rents and a greater proportion of information jobs have been associated with a larger rise in sublease vacancy in recent quarters. We think there are good reasons for this and expect these factors to be key to …
17th March 2021
Fall in commercial property debt not the start of a sharp decline After a stronger than expected increase in January, commercial real estate debt fell back in February. This suggests that last month’s gain was a one-off and not the start of a rapid …
12th March 2021
On the back of deeply negative office absorption last year and the continued flow of announcements from firms cutting their office space, we have made major revisions to our demand forecasts across our five-year horizon. The total drop in occupied space …
10th March 2021
Greater availability, lower prices and proximity to NYC have supported demand for Boston apartments during the pandemic. That implies demand may edge back as the country reopens, and some workers return to NYC. Rental growth is therefore likely to …
5th March 2021
A few weeks ago, we nudged up our Treasury yield forecasts for year-end 2021 and 2022, to 1.5% and 1.75% respectively. While intra-day yields exceeded 1.6% at one point last week, we don’t expect a continuation of those rises this year. And the bigger …
4th March 2021
In light of our latest long-term economic and financial market forecasts, we have revisited our views for commercial property performance over the next three decades. We think that average returns will be lower than in the recent past, but that property …
1st March 2021
On the back of rising Treasury yields, property valuations took their first hit in eight quarters during Q4. And, with Treasury yields climbing higher since, it is likely that valuation scores will fall further in Q1. Despite valuation scores declining in …
26th February 2021
Permanent increases in certain types of online sales will mean that regional and super-regional malls underperform the other retail sub-sectors for at least the next two years. Our forecasts point to another 12%-14% of capital value falls in 2021-22 for …
23rd February 2021
Fiscal and monetary stimulus have kept economic growth solid and will support a continued recovery. While this bodes well for occupier demand, structural factors have weighed heavily on the office and retail sectors. That weakness is set to persist this …
18th February 2021
Commercial property borrowing beginning to show signs of life Commercial real estate debt growth picked up in January, seeing its strongest rise since April. That likely reflects a sharp increase in investment deals completed at the tail-end of 2020. …
12th February 2021
The performance of the major FTSE NAREIT sub-sectors since the end of 2019 appears to suggest that our forecasts for 2021 might be too weak for industrial and too strong for the office and apartments sectors. But while we expect to upgrade our industrial …
10th February 2021
In our Future of Property research, we identified important post-pandemic shifts in most real estate sectors. How these trends interact will be key to the outlook for the urban locations where most real estate is clustered. We think it is premature to …
4th February 2021
The limited impact of the virus on New York City office construction means that we now expect at least 10mn sq. ft. of office space to be added across 2022-23. This could cause the vacancy rate to climb by 400-500 bps in the next three years. As a result, …
2nd February 2021
Big rise in share of surveyors who think the worst has passed Market sentiment remained close to cyclical lows, with rental and capital value expectations deeply negative for office and retail. But there are signs that the market is nearing a turning …
28th January 2021
We expect the boost in demand for life science product will support Boston’s office market. At the same time, office-to-lab conversions will limit the impact of a relatively large development pipeline, reducing the downside for Boston in the coming years. …
27th January 2021
Nascent signs of investors returning pose an upside risk to the outlook All-property total returns strengthened in Q4, broadly as we had expected. And the data continued to point to the importance of sector selection to returns. Perhaps the real surprise …
26th January 2021
Leisure and hospitality re-openings were behind the strongest job growth in the Autumn, although national data for December suggest that this could be reversed on the back of renewed lockdowns. With the sector still well short of previous peaks, we think …
22nd January 2021
Commercial property debt to see slow growth in the first quarter Commercial real estate debt growth slowed in December, probably reflecting a softening in investment activity on the back of renewed lockdowns. This points to a similarly slow start to 2021 …
15th January 2021
Many commentators are arguing that firms will shift towards a “hub and spoke” model following the pandemic. But we think the arguments for this approach are not as strong as they first seem, and that other strategies will dominate in the years ahead. The …
12th January 2021
For 2021 we highlight five key calls. In particular we expect a year of two halves in which yields initially rise, but end 2021 close to their current levels. Retail and office rent falls will accelerate and while regional mall returns are expected to be …
6th January 2021
The pandemic – and the associated increase in working from home – may cause a fundamental shift in the way that cities function in future. But this shift will not necessarily trigger a more fundamental economic decline in the world’s largest urban …
5th January 2021
The hotel sector has been hit hardest by the virus, and we expect its recovery will be slower than the other sectors. And, even when vaccines pave the way for an improvement in occupancy, structural changes to demand may limit a return to former glories. …
22nd December 2020
The changes to our forecasts this quarter reflect two partially offsetting factors – downgrades to occupier demand, and upgrades to the yield outlook. We expect NYC and San Francisco to be the worst affected markets in the next three years, seeing average …
18th December 2020
As the country begins to return normal next year, the hardest hit apartment markets in the country will recover. New York City looks particularly well-placed to benefit from returning non-office-based workers. Combined with aggressive rent cuts, which …
16th December 2020
Rise in commercial property debt at risk from new lockdowns Commercial real estate debt growth accelerated in November. However, renewed lockdowns in many states may slow the recovery in investment activity, limiting debt growth in the next few months. …
11th December 2020
Overview – While the news of vaccines provides a fillip to our economic outlook, it does not have a major bearing on our occupier market forecasts. After all, we expect that structural change, rather than cyclical growth, will be the major driver of …
Our upcoming Outlook will detail major upgrades to our capital value expectations. Rather than a total fall of around 10% at the all-property level, we now expect the cumulative decline to be just 5%. In mid-November we published an Update which noted a …
3rd December 2020
News about a vaccine has boosted financial markets and we have revised up our global economic expectations for the next two years or so. But while we think that this bodes well for the medium term, next year is still likely to be tough for most property …
2nd December 2020
Property valuations improved for the seventh consecutive quarter in Q3, following another sharp fall in equities earnings yields. But this was the smallest rise in valuation scores this year and changes so far in Q4 point to a partial reversal. (See Chart …
24th November 2020
Although the economy partially recovered in Q3, it is still operating well below capacity. Lower employment will weigh on the consumer sector over at least the next year. Office and retail have been the hardest hit sectors, with office sub-leasing …
20th November 2020
Virus-driven behaviour changes that support a faster online transition will boost industrial demand over the coming years. But we don’t believe the view that higher online spending will cause rents to detach permanently from the underlying strength of the …
19th November 2020
Rising rental vacancy rates in large cities have not been accompanied by a surge in first-time buyers (FTBs). Indeed, 2020 saw the lowest share of FTBs since 1987. That implies many of those rental households who left large cities are either renting in …
18th November 2020
Commercial property debt stable again as repayments resume Outstanding real estate debt fell markedly in October, but this was fully driven by a drop in residential loan balances. Commercial real estate debt was up only marginally, but the bigger point is …
13th November 2020
Third quarter data make it look increasingly likely that our year-end price forecasts will prove to be too negative. However, with the UK still on course for a capital value fall of close to 10% this year, this doesn’t necessarily mean that the US or …
12th November 2020
Cities with a large tourism sector, such as Las Vegas and Orlando, still employ 10% fewer people than they did in February, which will hurt retail spending and apartment demand. And, while office-using jobs are holding up in tech-led cities, these have …
10th November 2020
The volume of available sublease space already exceeds that seen in the last two downturns. And an average discount of 20% to landlord asking rents, rising to 30%-plus in some cities, will reduce the demand for available landlord space. As a result, while …
4th November 2020
