{"id":1004141133,"date":"2016-04-07T07:20:50","date_gmt":"2016-04-07T15:20:50","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004141133"},"modified":"2025-02-25T04:23:21","modified_gmt":"2025-02-25T12:23:21","slug":"cbre-survey-reveals-continued-strong-industry-fundamentals","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/cbre-survey-reveals-continued-strong-industry-fundamentals\/","title":{"rendered":"CBRE Survey Reveals Continued Strong Industry Fundamentals"},"content":{"rendered":"<p>By Keith Loria, Contributing Editor<\/p>\n<p>Cap rates for commercial real estate saw little movement in the second half of 2015 over the first half, as all cap rates for office, retail and multifamily were too minimal to be significant, according to a recent survey from\u00a0<a href=\"\/Users\/SamanthaGo\/Downloads\/North%20America_CapRate_H22015_Master%20(1).pdf\" target=\"_blank\" rel=\"noopener\">CBRE North America<\/a>.<\/p>\n<div id=\"attachment_1004141134\" style=\"width: 303px\" class=\"wp-caption alignright\"><a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Spencer-Levy-CBRE.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1004141134\" data-attachment-id=\"1004141134\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/cbre-survey-reveals-continued-strong-industry-fundamentals\/spencer-levy-cbre\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Spencer-Levy-CBRE.jpg\" data-orig-size=\"796,815\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"Spencer Levy, CBRE\" data-image-description=\"\" data-image-caption=\"&lt;p&gt;Spencer Levy&lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Spencer-Levy-CBRE.jpg?w=796\" class=\"size-medium wp-image-1004141134\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Spencer-Levy-CBRE.jpg\" alt=\"Spencer Levy\" width=\"293\" height=\"300\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Spencer-Levy-CBRE.jpg 796w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Spencer-Levy-CBRE.jpg?resize=293,300 293w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/04\/Spencer-Levy-CBRE.jpg?resize=768,786 768w\" sizes=\"auto, (max-width: 293px) 100vw, 293px\" \/><\/a><p id=\"caption-attachment-1004141134\" class=\"wp-caption-text\">Spencer Levy, Americas Head of Research, CBRE<\/p><\/div>\n<p>The only sector with a more significant change was hotel, which registered slightly higher cap rates due to a more noticeable decline in investment activity.<\/p>\n<p>\u201cBig picture is that real estate fundamentals across the five major appetites are strong. We have a strong foundation in all five types,\u201d Spencer Levy, CBRE&#8217;s Americas head of research, told <em>Commercial Property Executive<\/em>. \u201cI think capital flows are also strong, both domestic and foreign. We\u2019ve been seeing a conflict between strong fundamentals from the basic categories of investors.\u201d<\/p>\n<p><strong>Office<\/strong><\/p>\n<p>The report noted that cap rates for stabilized CBD office properties were essentially unchanged at the national level from the first half of 2015 to the second. One exception was for Class AA properties, which fell 10 basis points (bps) to 5.2 percent.<\/p>\n<p>Additionally, Tier III markets experienced slightly larger declines than Tier I and II markets, although they were still modest. Across all classes, Portland experienced the most downward movement in cap rates. Other Tier III markets that observed notable cap rate decreases in various classes were Columbus, Ohio; Kansas City, Mo.; Las Vegas; and Tampa.<\/p>\n<p><strong>Retail<\/strong><\/p>\n<p>The report revealed that retail overall lagged behind\u00a0the other sectors in rent growth, with many markets only now turning positive.<\/p>\n<p>\u201cThe good news is that it does provide plenty of upside in retail because rents recovered across the board,\u201d Levy said. \u201cThe other headline here is that there is virtually zero new construction and it\u2019s unprecedented how little there has been in the U.S. The limited supply growth and laggard of rental growth provides a great opportunity for people who want to invest in the space.\u201d<\/p>\n<p><strong>Industrial<\/strong><\/p>\n<p>Levy noted that the industrial asset class has gotten more attention in the past several years, and while it has always attracted REIT interest, it never got the headline attention that hotel or office or retail did.<\/p>\n<p>\u201cIndustrial is the new retail, and we say that because of the changes due to e-commerce,\u201d he said. \u201cSo many industrial facilities are now distribution centers for goods bought online. International investors have really discovered the asset class.\u201d<\/p>\n<p><strong>Looking Ahead<\/strong><\/p>\n<p>According to Levy, there\u2019s little to no change expected across all property types for the first half of 2016 for more than 60 percent of markets. That said, in markets where change is anticipated, cap rates are more likely to increase rather than decrease.<\/p>\n<p>\u201cMost institutional investors still expect to buy more in the U.S. this year than they did last year,\u201d he said. \u201cRetail investors are a little more mixed than that, but we have seen a remarkable turnaround in the market in the last six weeks. It went from good to bad to good again in 90 days. That\u2019s the kind of market we are in today.\u201d<\/p>\n<p>The report noted that approximately 20 percent of markets may experience increases of as much as 25 bps, versus only 10 percent of markets that may experience decreases. Less than 5 percent of markets are likely to experience movement greater than 25 bps in either direction.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>CBRE&#8217;s latest cap rates survey predicts business as usual for all property types, but offers a few warnings, as well. <\/p>\n","protected":false},"author":451,"featured_media":1004141134,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21782,21748,23891,21742,21747,21749],"tags":[],"class_list":["post-1004141133","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-development","category-industrial","category-national","category-latest","category-office","category-retail"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>CBRE Survey Reveals Continued Strong Industry Fundamentals - 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