Viewpoints

Industry insights, market outlook reports and commercial real estate
news, and trends from the Coldwell Banker Commercial brand.

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Sep 5, 2023

August Rental Activity Highlights

With soaring home prices and the peak rental season in full swing, renting has emerged as the contemporary alternative to buying. However, among the cities experiencing heightened listing activity, which ones are drawing the greatest attention from apartment seekers? According to research by RentCafe, Arlington, VA, retained its position as the most coveted city among renters for the month of August, maintaining its dominance from the previous month. Climbing three places from its July ranking of No. 5, Kansas City, MO, secures second spot. Minneapolis and Cincinnati, both situated in the Midwest, secure the third and fourth positions, respectively. Meanwhile, Denver secures the fifth position, marking a significant jump of six places since the previous month. The apartment listings in these cities garnered the highest engagement on RentCafe.com this month. This heightened engagement can be attributed to a combination of factors, including a substantial number of rental properties being saved to favorites, personalized search activity, limited unit availability, and a notably high volume of listing views overall.The Midwest significantly asserts its influence by securing ten out of the top 30 cities with the highest rental activity in August. A significant number of individuals are gravitating toward the Midwest, attracted by its affordable cost of living, expansive open spaces, and relaxed pace of life. The region is known for its friendly residents, economical land prices, and a tranquil lifestyle distinct from other parts of the United States, which has enticed a range of people to trade life on either Coast for the Midwest. The South follows closely with nine cities on the list. Concurrently, as the peak rental season unfolds, renters are shifting their apartment search focus towards suburban localities that provide convenient access to urban amenities. This shift has propelled Phoenix suburbs—Chandler, Gilbert, and Peoria—into the ranking as the freshest and most sought-after rental locations. Consequently, this month showcases the inclusion of seven Western cities in the roster of the nation's most desired renting destinations.However, the appeal of core urban living remains strong. In a remarkable advancement, New York City's Bronx ascends three places to occupy the No. 6 spot, edging ever closer to the top. Not to be overshadowed, Queens, the largest borough of NYC, follows suit, securing the No. 13 position this month—an impressive climb of six places from the prior month. Similarly, Philadelphia, Chicago, and Houston continue their sustained presence among the nation's premier cities for rental activity.Staying informed about the cities in the highest demand for renters is a crucial undertaking for investors. This knowledge empowers investors to make well-informed decisions that align with current market trends and capitalize on lucrative opportunities.

Aug 22, 2023

Best Places for Renters to Live in 2023

The primary contributor to the increasing cost of living for Americans are expenses associated with rent and mortgages, making it important to consider which cities offer the powerful combination of affordability and quality of life in 2023. It’s important to factor in a city’s apartment quality; local economy; employment opportunities, living expenses, traffic; schools, air quality, and natural amenities when making the difficult decision to plant roots in a new place. New data by RentCafe highlights where people living in the U.S. can get the most out of their renting experience in 2023. According to RentCafe, Southern states are the premier region for renters, claiming an impressive 36 out of the top 50 spots. This includes renowned rental hotspots like Miami and Orlando, FL, as well as lesser-known markets such as Plano, TX; Asheville, NC; and Birmingham, AL. Renters in this region have the luxury of choosing between the vibrant ambiance of a major city or the enchantment of a charming small town. Charleston, SC takes the No. 1 spot for Best Places to Live in 2023Charleston, South Carolina, the largest and oldest city in the state, secures the top spot in this year's ranking of the best cities for renters. This accolade is attributed to its optimal combination of apartment quality and cost of living, which ranks as the third-best in the country. Additionally, Charleston earns a commendable score in the local economy category. Notably, the city has gained recognition as a burgeoning tech hub with over 250 tech companies, positioning it fifth in terms of the local economy.Renters in Charleston can enjoy a suburban feel that offers the advantages of residing in a major city without compromising on factors like air quality or access to natural amenities. The data reveals that nearly half of the households in Charleston are occupied by renters. Furthermore, the average size of apartments in Charleston is significantly larger than the national average, measuring approximately 967 square feet. With a robust job growth rate of 5.9%, it is no surprise that Charleston claims the title of the best city for renters in 2023.Plano, Texas rises to the top in 2nd place Claiming the second spot on RentCafe’s list, Plano has recently gained recognition as the "City of Excellence." It garners high rankings in two key areas: the local economy, where it secures the second position, and quality of life, where it ranks sixth. Plano's distinguished reputation for fostering academic success makes it an ideal destination for families seeking a city with exceptional public schools. Furthermore, the city boasts excellent air quality and a significant proportion of high-end apartments, accounting for 78.2% of the housing stock. Additionally, Plano serves as the headquarters for several major corporations, including Bank of America, Hewlett Packard, FedEx, JCPenney, and Pepsi. Consequently, it exhibits one of the highest job growth rates nationwide, further enhancing its appeal.The Top 10 Places to Live in 2023 For commercial real estate investors, understanding the dynamics of the rental market and the best cities for renters in 2023 is crucial. With the rising cost of living, particularly in terms of rent and mortgages, it becomes essential to identify cities that offer a compelling blend of affordability and quality of life. As RentCafe's data shows, Southern states have emerged as the premier region for renters, occupying the majority of the top 50 spots. This presents a compelling case study for commercial real estate investors looking to tap into rental markets with strong potential.

Aug 2, 2023

June Rental Activity: Midwest States are In-Demand

As home prices soar and the rental season reaches its peak, the desire to rent has become increasingly prominent, reflected in a surge in demand for apartments. According to RentCafe's research, certain cities are experiencing a significant uptick in listing activity and attracting considerable attention from prospective apartment hunters. June experienced a shift in popularity among renters, with the Midwest emerging as the most sought-after region, closely followed by the South. Notably, the South secures the highest number of spots in the June ranking, with a total of 12 cities. The Midwest closely trails with 10 cities, dominating the top four positions. Atlanta maintains its status as the highest-ranking city in the South for the third consecutive month, securing the seventh spot overall.Among these cities, Kansas City, MO, retains its position as the most desired city by renters in June, maintaining the top spot from the previous month. Overland Park, KS, located nearby, claims the second position, while Minneapolis ranks third. These cities experienced the highest engagement on RentCafe.com, as evidenced by the significant number of rental properties saved to favorites, personalized searches, limited availability of units, and overall high listing views.Nearly half of June's most sought-after top 30 cities are located in the South after six new locations in the region entered RentCafe's ranking. For example, North Carolina tech hub Charlotte made it to the 20th spot, while neighboring college town Greensboro is this month’s 30th most in-demand city for renters. Kansas City Takes the No. 1 Spot for JuneKansas City maintains a consistent reputation as a top-tier destination for living in the United States. This distinction is substantiated by various factors, including its expanding population, an abundance of employment opportunities, affordable cost of living, and a plethora of enjoyable activities to partake in. Additionally, residing in Kansas City grants convenient access to arguably the finest barbecue culinary experiences available. Additionally, Overland Park, the largest suburb of Kansas City, achieved a remarkable ascent in this month's rankings, climbing an impressive 78 spots to secure the second position. In June, Overland Park maintained a similar number of available apartments compared to the previous year. However, renters displayed a significant increase in engagement, with a 27% rise in listing views and a substantial 63% increase in saved personalized searches. Notably, the number of favorited apartments in the city experienced an astonishing nine-fold surge in comparison. For commercial real estate investors, this presents an opportunity to explore investment prospects in Kansas City and Overland Park's rental markets The significant climb in rankings and increased renter interest highlight the potential for strong returns on investment. Furthermore, the stable availability of apartments in the area, combined with the heightened renter engagement, suggests a healthy market with a strong demand-supply dynamic.

Jul 18, 2023

Record-Breaking Number of New Build-to-Rent Homes Are Hitting the Market

The effects of inflation are being felt across the country – especially by those wanting to buy a home. With consumer prices rising, home prices soaring, and rising interest rates, saving money to buy a home and being able to afford one is becoming increasingly challenging. Additionally, economic uncertainty and the turmoil in the real estate market are making consumers hesitant to make such significant financial commitments. Therefore, build-to-rent homes present an excellent choice for individuals who value the flexibility of renting, as it eliminates the responsibilities and expenses associated with maintenance while providing the comfort and privacy typically found in a house. According to data by RentCafe, developers are building new single-family rentals at a rapid rate. 2022 witnessed a remarkable milestone in the housing sector, with a record-breaking completion of 14,541 new homes, marking a substantial 47% increase compared to 2021. The surge in the build-to-rent (BTR) trend can be attributed to the lasting impacts of the pandemic, such as the adoption of social distancing measures and remote work models. With 44,700 new BTR homes under construction across the nation, a staggering 97% occupancy level, (which is even higher than the 95% occupancy for apartments), it’s clear that this trend will only continue to rise in popularity. As explained by RentCafe, cities like Phoenix and Dallas have emerged as key hubs for rental homes, while Charlotte, NC; Atlanta, and Little Rock, AR, have experienced significant growth in single-family rentals over the past five years. In 2022, the construction of single-family homes for rent reached an unprecedented milestone, with over 14,500 completed houses, making it the strongest year on record. Additionally, in eight out of the top ten metropolitan areas for build-to-rent, the number of newly opened rental homes in 2022 reached its highest level in a decade. Notably, over the past two years, the scale and density of projects increased, with an average of approximately 130 units per property. Furthermore, the average size of each home also experienced growth, measuring 1,361 square feet in 2022, a 2.6% increase compared to the previous year.As demonstrated in the graph above, Dallas emerged as the leading metropolitan area in terms of the highest number of completed single-family rentals in 2022, with nearly 2,800 homes. This figure represents a remarkable 10-year peak in the city. Notably, the number of build-to-rent homes that became available in the Dallas metro last year was more than five times greater than the 500 units completed just a year prior. Following Dallas, Phoenix takes the second spot on the list, with over 1,500 build-to-rent homes being completed in 2022. This number represents a 9% decrease compared to the previous year. Atlanta secures the third position, with over 800 single-family homes for rent completed in 2022, marking a significant milestone that hasn't been reached in the past decade.As the popularity of build-to-rent (BTR) homes continues to soar, it will be fascinating to observe which cities seize the opportunity to construct and expand new single-family rental properties, considering the surging demand. Notably, prominent figures such as Elon Musk and Jeff Bezos have recognized the potential and are investing in single-family homes, as their value is expected to appreciate over time due to the increasing popularity and necessity of such properties. The attraction of single-family build-to-rent (BTR) communities for institutional investors is due to the housing shortage and the fact that these communities function similarly to multifamily properties. Investors find them appealing due to their remarkable lease renewal rates and the broad appeal they hold for a diverse range of renters. Additionally, consumers favor these communities as they often feature high-quality properties that provide a single-family residence experience.

Jun 21, 2023

The Most In-Demand Cities in the US

Renting has bloomed as a preferred option over buying due to soaring home prices and the start of the spring season, leading to a surge in apartment seekers. The CBC team is taking a closer look at which cities are experiencing the most rental activity and capturing the attention of potential renters. Last month, Atlanta emerged as the most desirable city for renters, followed by Kansas City, MO, and Albuquerque, NM, according to research by RentCafe. These cities witnessed significant engagement and interest in regard to apartment listings, with a high number of rentals being saved as favorites, personalized searches being conducted and overall elevated listing views.These three cities share common attributes that contribute to their appeal. They provide a balanced combination of affordability, employment opportunities, and entertainment choices that attract a wide range of renters. Detroit has made its mark ranking as fourth on the list of Most In-Demand Cities in the U.S., demonstrating signs of revitalization and growth. Lastly, Manhattan maintains its position as a perennial favorite among renters, despite the high cost of living, securing the fifth spot in the rankings.Atlanta is Hot Amongst RentersIn April, Atlanta emerged as the most coveted city among renters, experiencing a remarkable level of rental activity on RentCafe.com. Potential renters in Atlanta displayed a notable increase in interest, as they added twice as many listings to their favorites compared to the previous year. Moreover, rental listings in Atlanta attracted substantial traffic and recorded high rates of saved searches on RentCafe.com, propelling this city to the pinnacle of the rankings. Atlanta offers a multitude of job opportunities, with numerous companies expanding or relocating there. In fact, Atlanta secured the eighth position nationwide for office leasing activity in 2022, reflecting its growing prominence. Additionally, Atlanta has consistently established itself as one of the top tech towns in the country in recent years, further enhancing its appeal to renters.Kansas Popularity is GrowingKansas City secured the second position among the most sought-after cities in April for renting on RentCafe.com. KCMO experienced a remarkable surge, climbing an impressive 27 spots from the previous month's ranking. This significant jump is due to renters favoriting listings six times more than the previous year, while the number of page views for Kansas City listings ranks among the highest in the United States. Moreover, potential renters in Kansas City exhibited an 87% increase in personalized searches on RentCafe.com compared to one year ago. Renters are drawn to Kansas City due to its more affordable housing options and cost of living in comparison to other cities. Like Atlanta, the presence of enticing new tech job opportunities also adds to its appeal.New Mexico Climbing the Ranks 
Albuquerque, New Mexico, secured the third spot as one of the most sought-after rental locations in April, demonstrating a vibrant and active rental market. The number of rental listings in Albuquerque that were added to favorites experienced a notable increase, seven times higher compared to the previous year. Additionally, there was a significant surge in listing views, with a 66% increase compared to one year ago, marking the highest growth among all the cities included in RentCafe’s research. The rising popularity of the area propelled Albuquerque to climb an impressive 19 positions in the top 30 rankings within one month. There are multiple factors that attract potential renters, including the plethora of readily available outdoor activities and the thriving entertainment industry. As we discussed throughout the article, potential renters were most drawn to housing options in Atlanta, Kansas City, and New Mexico last month. We saw Alburquerque, New Mexico, and Kansas City climb the ranks as a top US cities for rental activity in April. Now that we’ve taken a closer look at these different cities and their various appealing factors for renters, are you surprised at the top 3 spots?

Mar 28, 2023

The Trend of Adaptive Reuse & What You Should Know: Part 2

As we discussed in part 1 of our Adaptive Reuse Deep Dive, this trend is understandably becoming more and more desirable for cities and developers alike. In part 2, we are outlining the appeal of adaptive reuse for developers, the environmental and economic benefits and the way it better serves the community compared to new construction and gentrification.

Mar 21, 2023

The Trend of Adaptive Reuse Apartments & What You Should Know: Part 1 

Adaptive reuse in commercial real estate refers to the process of redeveloping a building or property type into a new property, typically to meet higher demand in that sector. Adaptive reuse apartments have recently become a popular subject of discussion, as US office sales continue to sink. Over the past few decades, vacant offices buildings have been redeveloped into residential buildings, offering for-sale condominiums or rental apartments.

Nov 29, 2022

Reversal of Sentiment for Investors as 2022 Concludes

In a reversal from sentiment at the beginning of this year, investors are becoming increasingly bearish about the commercial real estate market. Faced with an economic slowdown, inflation, rising interest rates, supply chain issues, labor shortages and the threat of a recession, investors and capital providers to take a step back and reassess their strategies as this year concludes and the next begins.

Oct 25, 2022

CBC Reports Appetite Still Strong for CRE Mid-Year 2022

Commercial real estate activity remains elevated in 2022, which is a promising sign considering record-highs were reached last year. Market activity is being paced by three property types, multifamily, industrial, as well as a strong rebound in retail. A new Mid-Year Report from Coldwell Banker Commercial shows investors were eager to unlock cash flow and pushed cap rates to record-lows in 4Q21 and 1Q22 across most sectors. It is anticipated that demand for real estate will continue to be strong for high-growth markets. These positive signs comes despite widespread supply chain disruptions, inflation and political uncertainty around the war in Ukraine.

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.

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