{"id":1004035525,"date":"2011-12-09T06:17:21","date_gmt":"2011-12-09T14:17:21","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004034955"},"modified":"2022-12-08T15:17:09","modified_gmt":"2022-12-08T23:17:09","slug":"jll-2012s-cre-outlook-still-in-flux-bright-spots-exist","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/jll-2012s-cre-outlook-still-in-flux-bright-spots-exist\/","title":{"rendered":"JLL: 2012's CRE Outlook Still in Flux; Bright Spots Exist"},"content":{"rendered":"

December 9, 2011<\/strong>
\nBy Nicholas Ziegler, News Editor<\/em>
\n

\"\"<\/a>

Image courtesy Flickr Creative Commons user edenpictures<\/p><\/div><\/p>\n

If there\u2019s going to be one constant for the commercial real estate outlook next year, it\u2019s that multi-family is going to remain the darling investment class. During a presentation yesterday, members of Jones Lang LaSalle\u2019s research teams each gave their outlooks for 2012 as the global economy remains in a state of flux. The overall consensus was that, while things are set to improve, there are going to be very few areas that return to their pre-recession levels.<\/p>\n

\u201cWhile we do believe the underlying engines of growth are in place,\u201d Benjamin Breslau, managing director of research for the Americas, said, \u201cthere will be some clear lagging sectors. Namely, unemployment remains stubbornly high, and 2012 will be another flat year for housing in general. That will weigh on consumer confidence.\u201d<\/p>\n

When looking at the office sector, the forecast was positive, but muted \u2013 because, as John Sikaitis, senior vice president and director of office research, said, \u201cwhile we are heavily dependent on job growth, the office-using sectors are growing at 1.8 percent year-over-year.\u201d<\/p>\n

What was interesting about commercial office space, he noted, was the bifurcation in the market: Through the first three quarters of 2011, just 20 percent of the market by geography accounted for 45 percent of the occupancy gains. Most of those gains were driven by the high-tech and energy industries, and office property for those sectors are heavily concentrated in the West and Southwest. \u201cEmployment levels are increasing between 10 and 13 percent in oil and gas, and high-tech is at 5 percent,\u201d Sikaitis said. \u201cThere are big margins between office segments.\u201d<\/p>\n

Through 2012, Sikaitis and his company see tenant leverage to continue, with minimal rent growth, in the majority of geographies. There may even be potential upticks in concessions, he concluded.<\/p>\n

In the industrial sector, there will be a growing scarcity of space for big-box logistics and distribution space, according Aaron Ahlburn, vice president & director of industrial research. With that Class A space becoming more and more limited, 2012 will bring both rent growth and a measured return to normal levels of development. \u201cThere is a gap in pricing at the top end of the market,\u201d Ahlburn said, \u201cand this is leading to a slow and steady recovery. There\u2019s going to be increased speculative development in areas such as the Inland Empire.\u201d<\/p>\n

Hotels gained serious strength in 2011. Saying the sector had \u201cpositive momentum despite the overhang of volatility,\u201d Lauro Ferroni, research associate, said. RevPAR has grown at its fastest pace in five years, and hotel operators are budgeting for a growth in rates during 2012.<\/p>\n

But, in all likelihood, most of 2012\u2019s good news will stem from multi-family. \u201cWe expect performance to continue,\u201d Breslau said. \u201cThere\u2019s a fundamental shift in the United States away from home ownership.\u201d And the numbers backed that up: During the second quarter of 2011, home ownership was it its lowest in at least 12 years, dipping below 66 percent.<\/p>\n

\u201cGiven continued strong performance,\u201d Breslau said, \u201cwe expect metro vacancy [for apartments] to dip below 5 percent in 2012.\u201d Rents will likely continue their upward march, with a possible acceleration of growth for prime markets through the first half of next year.<\/p>\n

On the investment side, capital will continue to flock to apartments as an investment vehicle, as the sector will continue to be prized for its fundamentals, liquidity, stability and financing options.<\/p>\n","protected":false},"excerpt":{"rendered":"

Jones Lang LaSalle’s outlook for 2012 shows that, while the economy remains in a state of flux, things are generally set to improve. But there are going to be some very bright spots — such as the multi-family sector, which is going to remain the darling investment class. <\/p>\n","protected":false},"author":1201,"featured_media":1004038151,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21782,21808,21751,21748,21783,21742,21747,15],"tags":[],"class_list":["post-1004035525","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-development","category-featured","category-hotel","category-industrial","category-investment","category-latest","category-office","category-west"],"acf":[],"yoast_head":"\nJLL: 2012's CRE Outlook Still in Flux; Bright Spots Exist - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/jll-2012s-cre-outlook-still-in-flux-bright-spots-exist\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"JLL: 2012's CRE Outlook Still in Flux; Bright Spots Exist\" \/>\n<meta property=\"og:description\" content=\"Jones Lang LaSalle's outlook for 2012 shows that, while the economy remains in a state of flux, things are generally set to improve. 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