{"id":1004123693,"date":"2015-07-22T05:00:08","date_gmt":"2015-07-22T13:00:08","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004123693"},"modified":"2022-12-06T07:29:03","modified_gmt":"2022-12-06T15:29:03","slug":"the-truth-about-cre-in-q2","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/the-truth-about-cre-in-q2\/","title":{"rendered":"The Truth About CRE in Q2"},"content":{"rendered":"

By Keith Loria, Contributing Editor<\/em><\/p>\n

\"Jeffrey<\/a>

Jeffrey Havsy, CBRE<\/p><\/div>\n

CBRE Group, Inc., has released its Q2 CRE market report and revealed the U.S. commercial real estate market has exhibited strong momentum across all property types in the second quarter of 2015.<\/p>\n

\u201cCommercial real estate is in a sweet spot right now. The market isn\u2019t too hot or too cold. There are steady market improvements at a sustainable pace,\u201d Jeffrey Havsy, CBRE\u2019s Americas chief economist, told Commercial Property Executive<\/em>. \u201cWe all know that real estate is prone to extremes (booms to bust), but we are currently in a good place.\u201d<\/p>\n

The report shows that employment is a major driver of apartment demand and U.S. economic growth has contributed to the strong demand we\u2019ve seen in the last several years. This has translated into relatively tighter markets with low vacancy and strong rent growth.<\/p>\n

\u201cThere are also questions surrounding the falling homeownership rate\u2014which is at a 20-year low\u2014and whether would-be buyers are continuing to rent,\u201d Havsy said. \u201cA number of factors contribute to the downward trend in homeownership: the repair to household balance sheets since the recession, a lack of available inventory of for-sale homes, tight lending markets; though, it isn\u2019t clear to what extent this is impacting the multi-family markets.\u201d<\/p>\n

The office vacancy rate reached its lowest point since the third quarter of 2008, while vacancy dropped to 13.5 percent with a decline of 40 bps and improvement remained broad-based across the U.S. office markets. The South and West regions saw the greatest improvement over the past four quarters, with notably strong performance in San Jose, Nashville, San Francisco, Richmond, Orange County and Austin.<\/p>\n

The U.S. industrial real estate market has now seen flat or declining availability rates for 21 consecutive quarters, the longest stretch since CBRE began tracking the national market in 1989.<\/p>\n

\u201cThe large (top 10) industrial markets are doing particularly well. They benefit from being near the largest metro areas, or serve as a distribution hub for goods moving throughout the country,\u201d Havsy added. \u201cThis is where we are seeing the bulk of new construction so far in the cycle, notably in the big-box warehouse space. Secondary markets are also performing well, however, especially as investors are forced to reach outside their typical sandbox in search of value.\u201d<\/p>\n

According to Havsy, in many markets across the country, space is very hard to come by, for both potential tenants and buyers.<\/p>\n

\u201cIf it\u2019s available and adequate it\u2019s getting snatched up. This isn\u2019t sustainable long term, but will help as higher levels of new supply are brought online,\u201d Havsy said. \u201cI wouldn\u2019t necessarily call it strong momentum for the retail sector specifically but I do think the economic drivers of demand for retail sales\u2014examples: a tightening labor market, rising real wages, low gas prices\u2014are in place to provide support to the sector once consumers are less cautious about spending. As seen in the most recent sales statistics, this hesitation is still playing a large part in preventing sustained sales momentum.\u201d<\/p>\n

The report shows that many East Coast port markets are currently undergoing infrastructure modifications to accommodate larger ships passing through the Panama Canal beginning next year. The structural change from ecommerce\/omni-channel is prompting opportunity in smaller light industrial\/infill locations close to [higher income] population centers.<\/p>\n

\u201cWe are forecasting a continued increase in demand for space, supported by the strengthening economy and steady job growth,\u201d Havsy concluded. \u201cDemand will outpace supply and continue to bring down availability rates and drive rent increases (especially for retail). The supply pipeline for industrial is increasing, but that will relieve some of the pressure from pent up demand where tenants are having difficulty finding the space they want in the location they want.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

CBRE Group has released its second-quarter CRE market report and revealed a few surprises about the commercial real estate market.<\/p>\n","protected":false},"author":451,"featured_media":1004123694,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1004123693","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nThe Truth About CRE in Q2 - 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\/the-truth-about-cre-in-q2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Truth About CRE in Q2\" \/>\n<meta property=\"og:description\" content=\"CBRE Group has released its second-quarter CRE market report and revealed a few surprises about the commercial real estate market.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/the-truth-about-cre-in-q2\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2015-07-22T13:00:08+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-06T15:29:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2015\/07\/Jeffrey-Havsy.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"448\" \/>\n\t<meta property=\"og:image:height\" content=\"284\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Keith Loria\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-truth-about-cre-in-q2\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/the-truth-about-cre-in-q2\/\",\"name\":\"The Truth About CRE in Q2 - 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