Oil Prices Continue To Fall, Effects Felt In CRE Sectors
As reporting about the world’s oil markets increasingly features terms like “glut” and “supply overhang,” property prices directly related to US oil extraction are widely taking a beating. At the same time, other indirectly related property sectors such as retail are benefitting from low gas prices. In the wake of the latest drop in oil prices, here’s a quick roundup of the recently reported ripple effects in commercial property
- Houston Commercial Vacancy Rates Highest In 20 Years – (Reuters) A CBRE study lifts the stetson on the intimate relationship between Houston’s office market and the pumping, hauling and selling of the black stuff. A wave of sublease offers has tenants scrambling to reduce their space footprint in Space City.
- Pimco reports stormy future for CRE nationally – (TheRealDeal) Pimco’s most recent report cites oil price free-falls as driver for a “blast of volatility” in US CRE.
- Consumers, retail and cheap gas – (JPM) – Banking giant reviews 57 million anonymized debit and credit card accounts, arrives at retail spending patterns centered around gasoline savings.
- Oil industry exposure spells trouble for CMBS (Fitch) – The securitization market and oil prices may be taking a dive together, says ratings giant.
- North Dakota oil production sees biggest drop ever (Bismark Tribune) – The performance of Bakken wells and the leases upon which so many sit has become an issue as production is ratcheted back to match the skyrocketing world supply.