Businesses are showing their confidence in the economy in early 2015, actively seeking growth and space expansion. Though national office fundamental growth crawled even slower in the first quarter than in previous months, it’s clear the industry’s reset button has been hit hard, experts say, and the next three years should beat records for quick rent growth and absorption.
Two new studies show that investors, developers and brokers have accepted that catering to the tech sector, and the new-fangled space needs of its employees, is the best path to low vacancy and high rents.
The top 25 hotel markets in the U.S. had an average occupancy growth of 5 percent in 2014, as the industry proved it is just about fully recovered from the devastating impact of the recession. U.S. cities with improving job and housing markets are doing best of all.
Demand for e-commerce fulfillment centers and new manufacturing facilities has shifted industrial space requirements from large properties to mid-sized buildings, already in short supply following the recession. The shift is contributing to higher prices for infill land parcels.
Miami’s industrial market, currently enjoying record low vacancy of about 4.5 percent, is attracting more powerful investors who want to buy in as demand overwhelms supply and new Panamax-sized ships pull up to the newly expanded port.
Institutional industrial investors unhappy with current low cap rates for existing class-A properties have instead begun to partner with developers on new speculative construction in anticipation of higher returns.
Medical office investors today have to be thankful they’re already in the game—vacancy in the sector is down, investment sales are at their highest and new construction is still falling behind current demand.
Office building owners know it’s almost impossible to measure the success of adding sustainable features, as most tenants don’t make their leasing decisions solely on the basis of water or electricity savings.
The U.S. industrial markets have been chugging along with record-low vacancies, and the outlook appeared smooth for 2015—until a labor dispute slowed to a crawl work at 30 ports along the West Coast this past week.
The technology industry, which led the U.S. office sector recovery since the recession with growth of more than 5 percent a year, is now encouraging owners of warehouses and manufacturing sites in high-demand areas to sell their properties for high-profit conversions.