![\"\"](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/12\/Waterford-Bay-Apartments.jpg\")
<\/a>Rendering of Waterford Bay Apartments, which will be built by Stoneleigh Cos. in an Opportunity Zone in Saint Paul, Minn. Rendering courtesy of Stoneleigh Cos.<\/i><\/p><\/div>\n Created in late 2017, the federal Opportunity Zone program has so far failed to live up to its hype. U.S. Treasury Secretary Steven Mnuchin predicted that the tax-advantaged census tracts would ultimately vacuum up more than $100 billion<\/a> in private capital, but analysis of publicly available data suggests that actual fundraising is just a fraction of that.<\/p>\n But investor interest may heat up since the federal government released the final OZ rules<\/a> less than two weeks ago. Incorporating industry feedback after the latest round of draft rules were unveiled in April<\/a>, the new regulations remove lingering uncertainties and grant more flexibility to real estate investors, developers and fund managers. The newfound clarity could potentially open the door to more aggressive investment in the nation\u2019s more than 8,700 low-income communities in 2020.<\/p>\n This year saw a number of big players get behind the program, including CIM Group, which launched a $5 billion Opportunity Zone fund in January, and Avanath Capital Management, which partnered with Opportunity Assets Group to set up an OZ fund<\/a> aiming to raise $300 million for affordable and workforce housing in April. Starwood Capital Group revealed in May that it is developing a charter school project in New York City\u2019s South Bronx neighborhood as part of a new $500 million OZ strategy<\/a>.<\/p>\n Rendering of National Landing, JBG Smith’s 6.2 million-square-foot office campus in Arlington, Va., where Amazon has signed leases for more than 580,000 square feet. Image courtesy of JBG Smith<\/em><\/p><\/div>\n It would be remiss not to mention the ever-present tech behemoth that is Amazon in a yearly round-up article. The Jeff Bezos-helmed e-commerce giant, now the most valuable retailer in the U.S., has been on a real estate roller coaster over the past 12 months\u2014opening new facilities, signing new leases and entering new markets across the U.S. and Canada.<\/p>\n First, the company stunned New York City on Valentine\u2019s Day, announcing it was scrapping plans<\/a> to develop 4 million square feet for a second headquarters in Long Island City, N.Y., following pushback from the community and local elected officials. Among other things, some local and state representatives took issue over a proposed $2.5 billion in tax credits and cash grants from the city and state. Though Amazon abandoned its New York plans, the company did move forward with previously planned developments<\/a> in Crystal City, Va. and Nashville, Tenn.<\/p>\n After the HQ2 debacle in New York, the company spent the next several months expanding its significant footprint in cities across the country. In Chicago<\/a> and Austin<\/a>, Amazon added considerable square footage to its leases, opened new fulfillment centers in Quebec<\/a> and Florida<\/a>, and signed a massive 335,000-square-foot lease<\/a> in Manhattan\u2019s Hudson Yards district earlier this month.<\/p>\n Spaces flexible office location in Menlo Park, Calif. Image courtesy of Spaces<\/i><\/p><\/div>\n The We Cos. dominated flexible office news this year as the Manhattan-based parent of WeWork shelved its IPO plans and received a $9.5 billion bailout package from Japan\u2019s SoftBank. The turmoil experienced by the world\u2019s leading coworking brand has prompted a widespread rethink<\/a> of the industry\u2019s viability, but the market for nontraditional office space is still mushrooming<\/a>. The Instant Group calculates that U.S. flexible office supply surged by 10 percent year-on-year in 2019, closing out the year with more than 6,000 flexible office locations. Based on demand indicators, the company forecasts that number could grow to upwards of 10,000 by 2023.<\/p>\n Leading the way are major operators such as Knotel, which boosted its presence in Manhattan this year with a series of new leases<\/a> while seeing its valuation crack $1 billion in August. San Diego-based CommonGrounds Workplace, which raised $140 million this year, has also been growing aggressively, venturing into new markets such as Philadelphia<\/a>, Minneapolis and Portland, Ore<\/a>. In the meantime, Switzerland-based IWG<\/a> (formerly Regus), has revealed plans to expand its global network of office spaces to 30,000\u2014roughly tenfold its current number\u2014by embracing a franchising model. Despite these large-scale moves, much of the action in the sector is driven by niche operators<\/a> that manage one or two locations.<\/p>\n Asset in logistics portfolio acquired by Investcorp in November. Image courtesy of Investcorp<\/i><\/p><\/div>\n Industrial real estate experienced another banner year<\/a> in 2019, with rents reaching new highs and absorption on track to surpass 200 million square feet for the sixth year in a row, according to a recent report by Cushman & Wakefield. Propelled by the growth of ecommerce, traditional retail and third-party logistics providers, leasing activity was robust and vacancy rates hovered at a historic low of 4.8 percent.<\/p>\n Investors expressed their craving for warehouse and distribution facilities by scoring a series of industrial mega-deals this year. Blackstone made the biggest splash in June, announcing it would nearly double its industrial footprint through the $18.7 billion purchase<\/a> of a portfolio spanning 187 million square feet across the U.S. from Singapore-based Global Logistic Properties. The private equity giant followed up that deal<\/a> by acquiring the light industrial division of Colony Capital for $5.9 billion in September.<\/p>\n Logistics giant Prologis, which reportedly vied with Blackstone for the GLP portfolio, separately notched its own industrial mega-deals. In October the company agreed to buy<\/a> rival Liberty Property Trust, which operates more than 107 million square feet of logistics space, in a transaction valued at $12.6 billion. Norway\u2019s sovereign wealth fund also got in on the action with Norges Bank Investment Management partnering with Prologis to snap up<\/a> a 127-asset U.S. logistics portfolio for $2 billion in November.<\/p>\n 30 Hudson Yards, where Allianz bought a stake in an office condo (center). Image courtesy of Rhododendrites via Wikimedia Commons<\/i><\/p><\/div>\n Ever since China sharply pulled back its investments in U.S. real estate, the foreign investment scene has been ripe with change. Trade wars, the threat of a looming economic slowdown and political uncertainty have caused investors to take more caution. Canada took China\u2019s spot as the biggest investor<\/a> in American commercial real estate while foreign buyers continued to branch out from traditional core office markets into retail, industrial and senior housing and widened their geographic scope.<\/p>\n Cross-border investment slipped to 10 percent of total capital plowed into U.S. commercial real estate in the 12 months through the third quarter of 2019, driven in large part by the ongoing retreat of Chinese investors, according to Real Capital Analytics. Dispositions topped acquisitions by $18 billion in the first three quarters of the year.<\/p>\n That said, investors from Canada, Germany, Singapore and elsewhere continued to play a significant role in the world\u2019s largest and most liquid commercial property market. German insurance firm Allianz paid $384 million<\/a> for a piece of 30 Hudson Yards, the second-tallest office skyscraper in New York City, in June. Singapore\u2019s Mapletree Investments and Mapletree Industrial Trust chalked up<\/a> two North American data center deals with Digital Realty totaling nearly $1.4 billion in September.<\/p>\n","protected":false},"excerpt":{"rendered":" These were the deals, trends and moments that shaped and defined commercial real estate in 2019. <\/p>\n","protected":false},"author":745,"featured_media":1004378990,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,23891,21742],"tags":[],"class_list":["post-1004378888","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-national","category-latest"],"acf":[],"yoast_head":"\nOpportunity Zones gear up for their moment of truth<\/strong><\/h2>\n
<\/a>Amazon nixes New York, but grows nationwide<\/strong><\/h2>\n
<\/a>Flexible office forges ahead, but crucible awaits<\/strong><\/h2>\n
<\/a>Investors bet on sheds in flurry of mega-deals<\/h2>\n
<\/a>Foreign investment\u2019s big shift <\/strong><\/h2>\n