Commercial Real Estate Trends for 2016

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Commercial Real Estate Trends for 2016
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Trends

• Global Urbanization
• Rise in Interest Rates
• Increased Capital Flows
• Limited Supply Additions

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Global Urbanization
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Global Urbanization

• It looks like the global urbanization trend
  continues in US as it does in the other parts, as
  the Millennials and boomers lookout for enhanced
  access to jobs and amenities, from shopping to
  healthcare.
• Its been noted that, the US urban population
  has increased by 12.1 from 2000 to 2010,
  outpacing the nations overall growth of 9.7

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Rise in Interest
Rates
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Rise in Interest Rates

• The interest rates seem to rise for sure this
  year the forecasts may vary, but its more
  likely that, the Federal Funds Rate (FFR) will
  rise at least to 1 in 2016, with the treasuries
  of 10 years pushing fractionally higher towards
  3 mark.
• But, the Federal is more likely to weigh the
  effects of each and every move before it adds an
  additional friction to the current economic
  growth trends.

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Increased Capital Flows
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Increased Capital Flows

• US property market is the most stable and
  transparent market in the world because of which
  it has been an easy choice for many investors.
• According to Real Capital
• Analytics (RCA), a research
• firm, just the foreign
• purchases of US real estate
• properties rose up to 62 billion with Norway,
  Canada, China and Singapore leading the wave.
• Looking at this statistics, a substantial
  proportion among the Association of Foreign
  Investors.

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Limited Supply
Additions
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Limited Supply Additions

• Limited supply additions seem to continue with
  only modest supply growth in the sectors like
  multifamily housing, student and senior housing,
  single tenant industrials and so on.
• As the last recession was a bit deep and
  protracted, the lending sources were extremely
  doubtful about funding new constructions.
• Also, many local and regional banks were hit by
  the residential mortgage crisis, and both the
  commercial and residential real estate were seen
  as highly risky sectors.

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