insights Archives - Page 6 of 30 - Viewpoints

Nov 15, 2022

Do Company Priorities Align with Workers’ Shifting Values?

Last week’s blog touched on the Americans’ approach to work, and where it fits in our daily lives, has evolved over the past several years. For many people, the mandatory hiatus from in-person work trigged a re-evaluation of the type of work they want to do and where they want to do it.

Nov 8, 2022

BY THE NUMBERS: Are We Going Backwards, Baby?

There’s no denying that the pandemic has changed the way we view work and how it fits into our lives. Broader pressures such as inflation, goods shortages and housing prices, combined with growing concerns about overall health, quality of life, compensation and work satisfaction, have driven countless workers to make more demands of their employers. Meanwhile, employers in virtually every industry have found themselves without much leverage, given the condition of the current employment market.

Oct 18, 2022

In a Troubling Time, Silver Lining Emerges for CRE Pricing

Despite uncertainty and volatility that cloud the economy, there’s reason to be a bit upbeat these days. A recent commercial property price report from researchers at MSCI’s RCA division shows the RCA CPPI National All-Property Index climbed 18.5% in June 2022 from a year prior. That’s close to the pricing growth rates of recent months and not far from the 19.5% record pace seen at the start of 2022. The index rose 1.3% from May.

Oct 4, 2022

Marijuana’s Impact on Real Estate

A majority of adults in the United States currently have access to cannabis, whether medically or recreationally. As of this year, 19 states have legalized recreational cannabis use, while 39 states have legalized medical marijuana use. Over the years, the general perception of cannabis has evolved. Once seen as a danger to communities and to younger children, cannabis is now more readily available and marijuana sales produce taxable income for local economies.

Sep 27, 2022

Demand Drivers in a Heated U.S. Industrial Market

The industrial market has stood as one of the hottest commercial real estate property sectors in the U.S. for several years. In fact, CommercialEdge just released its July national industrial report, analyzing?the U.S. industrial market’s performance through June 2022.?

Sep 6, 2022

Will PE Help Homebuilders Out of a Tight Spot?

Last week’s blog touched on the housing recession, which is officially in progress now that builders have pulled back, and its impact on the broader property markets. As would-be buyers increasingly back out of deals, homebuilders are increasingly finding themselves holding the bag. Combine that with astronomically rising costs for construction, materials and labor, and it’s of little wonder that homebuilders have pulled back from the market.

Aug 30, 2022

Housing Recession Is Now Official, but Won’t Be Like Prior Downturns

It’s official: the U.S. housing market is in a recession—at least, that’s the consensus of the some of the industry’s leading economists. However, how the downturn is playing out is proving to be quite nuanced, geographically varied and, well, confusing.

Aug 23, 2022

Inflation in the Economy Impacting Commercial Real Estate

Inflation has been on everyone’s minds lately as increased prices are affecting the entire economy and driving up costs for food, consumer goods, labor, housing, and commercial real estate. To help curtail inflation, the Federal Reserve Bank has been raising the target interest rate with three increases since March of this year for a total increase of two full percentage points. By increasing interest rates, the fed works to cool demand for products and services (by dissuading borrowing) which helps prices come back down to a more normalized growth rate. That means payments normally made with borrowed funds, such as real estate, become even more expensive. In fact, the 2% increase in interest rates equates to about 40% higher payments for borrowers of commercial real estate who typically borrow funds with a 20-year amortization rate. I was recently listening to the Commercial Investment Real Estate Podcast produced by the CCIM Institute and Martha Peyton, PhD., who is the global head of real estate research at Aegon Asset Management. Peyton shared some interesting observations on inflation and its effect on commercial real estate. Through analyzing historical data, she noticed that when inflation hits, people look to purchase CRE as an inflation hedge. While this is a fact supported by past transactions, she delved deeper to find out why. One of the main reasons that CRE is a sound investment during inflationary periods is that commercial leases have escalation clauses giving the landlord the ability to pass along common area maintenance (CAM) costs to the tenant, so as costs increase, net income remains strong. Short-term leases, such as apartment leases which are often one-year, are especially good because rents and terms can be adjusted easily. This is exactly what Redfin reported as happening, with asking prices for rental housing increasing an average of 17% this year nationally.

Aug 16, 2022

How Green is the Office Space in Your City?

CBC frequently discusses real estate’s impact on the environment. In the past, the CBC team has researched ESG (Environmental, Social, Governance) initiatives and how to incorporate those values into a business model, the negative impact real estate has on climate change mitigation, and steps many companies are taking to reduce their carbon footprint. Fortunately, we are seeing investors and developers become increasingly interested in improving the quality of our built environment. According to a new report by 42Floors, as many as half of the top office projects in the U.S. due for completion in 2022 reflect that interest in sustainability-oriented building practices. In this blog, we will discuss the three cities in the U.S. that have the greenest office space with data from 42Floor’s “How Green is U.S. Office Space? Mapping Top Cities & Tracking 10 Years of Development (2010-2020)” report.

Aug 2, 2022

The World’s Most Expensive Places to Develop Real Estate

Despite global market volatility and a variety of challenges in the industry, construction activity still continues to increase across multiple markets. Some of these challenges include universal inflationary trends founded on construction labor shortages, demand exceeding supply, and disruption in supply chains hitting costs and programs. According to Turner & Townsend’s 2022 International Construction Market Survey, when it comes to increasing construction costs—including labor and materials costs—the United States dominates rankings of the most expensive places in the world for real estate development.