It was another memorable year for commercial real estate. The industry has mounted a long and steady recovery since the 2008 financial crisis. This year brought more of the same with improving fundamentals in all areas. Investment sales volumes were up. Vacancy rates fell. Capital was more available. And development activity increased.
It was another year of dominance for the multifamily sector. It remains the preferred property type of most commercial real estate investors and is the strongest performer by any metric you look at. Cap rates and vacancy rate remain near historic lows. Rents are rising. And the development pipeline is healthy with most observers comfortable that there is no immediate danger of overbuilding.
It's been an active year for commercial real estate finance and investment. Some of the big themes included the continued reemergence of the CMBS sector, increased activity on the part of private equity investors and growing interest in alternative property types within the commercial real estate field.
The frequency and severity of these conflicts is not just political posturing, however. The fights have had real world impacts, including on the economy. The net result is that the unpredictability inside the Beltway is creating uncertainty in the economy.
In the past two years, NREI has had a relentless focus on transforming its offerings. As part of that evolution, there are changes behind the scenes as well. NREI Publisher Marianne Rivera today leaves our fold to take on the role of associate publisher for our sister publications: WealthManagement.com, REP., and Trusts & Estates.
The NREI staff identified key ways that the commercial real estate industry is evolving and issues that will shape the coming years, and found people who are positioned to greatly influence those trends.
Today, student housing is a whole new ballgame. Renters at facilities operated by major student housing firms can expect on-site fitness centers, grocery stores, tennis courts, game rooms, pools and Jacuzzis and high-speed Internet.
Institutional investors including pension funds, private equity funds, hedge funds, life companies, REITs, endowments, sovereign wealth funds and other players with large pools of investable capital are taking new chances to boost their yields.