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Miami made the list as the 10th-ranked market in CBRE’s survey, which asked 1,000 investors, “Which metro in the Americas do you believe to be the most attractive for property investment purchase?”
Ten-X ranks Miami as number one of its top five “buy” markets for retail assets, forecasting weighted average annual NOI growth for 2017/2010 at 5.2 percent.
“We think everyone will be cautious on retail, but some metros should outperform others, including those in Florida and Texas and out West,” say Barabar Byrne Denham and Victor Calanog, economists with research firm Reis Inc.
A block away from Fenway Park, Boylston Street is Boston’s 24/7 retail and entertainment center and asking rents on this premier street average $68.87 per sq. ft., 95.9 percent higher than the average for the rest of the market. The area is mostly occupied by financial and legal services firms, but that could change, as the growth of the life sciences sector in nearby Cambridge is forcing many office users, including tech companies, across the Charles River to Boston’s Central Business District (CBD).
Chicago rose from the 11 the place in CBRE’s survey results last year, to ninth in 2017. The outlook is particularly bright for industrial properties here, according to the Reis researchers.
“The industrial market saw the highest rent growth at the end of 2016. Markets that should fare well include the largest ones (Chicago, Los Angeles, San Bernardino-Riverside, Dallas and Houston),” say Byrne Denham and Calanog.
Denver tied for eighth place with Boston. Last year, it ranked ninth.
Houston is the seventh-most attractive market for investors right now, according to CBRE. It experienced a big jump from last year—in 2016, the city did not make the top 10 at all.
“Houston has seen strong job growth and already endured a recessionary market in office, but weathered well in the other asset types, retail and industrial in particular,” Levy says.
Ten-X lists Houston as one of its top five “buy” markets for retail for 2017, ranking it third after Miami and Ft. Lauderdale, Fla.
Investors placed Seattle in sixth place in terms of market attractiveness, but this is up one spot from seventh place last year, according to CBRE. Ten-X ranks the Seattle market as number five of its top five “buy” markets for industrial real estate.
“Oakland, San Diego, Seattle have robust economies of trade distribution and not too much supply,” says Muoio.
San Francisco and Atlanta tied for fifth place in CBRE’s investor survey. For San Francisco, this marks somewhat of a tumble, as it was in the number four spot in 2016.
Ten-X deems San Francisco a top five “sell” for multifamily, placing it in third place on the list. It calculates the city’s 2017/2020 weighted NOI growth will decline by 3.7 percent.
The crossroads to the South, Atlanta will add approximately 23.4 sq. ft. of industrial space this cycle. With the plethora of new construction, however, direct vacancy is at 7.8 percent and asking rents average $4.50 per sq. ft.
CBRE found that Washington D.C. was the fourth most attractive market for real estate investors, marking a noticeable jump in perception. The city was in eighth place last year.
New York ranked as the third most attractive market for investors, CBRE found. It fell from second place in 2016’s ranking.
Ten-X lists New York as the number one sell in its top five “sell” markets for multifamily, however, noting that 2017/2020 weighted NOI growth will likely dip by 5.1 percent.
Developers are now building more garden-style apartments in Dallas than any other metropolitan area in the U.S., in absolute numerical terms, according to CoStar. However, relative to the size of this large city, all that construction still adds up to fewer new units per capita than in areas like Raleigh or Kansas City.
Strong demand and available land have kept developers building garden-style apartments in Dallas throughout this real estate cycle. Dallas is number two on the list of places where developers have opened the most such units since 2010, according to RealPage.
Los Angeles remains in top place as the most attractive market for investors, the CBRE survey found. Ten-X ranks the city as number three in its top five “buy” markets for office.
The city is showing good fundamentals for both industrial and office properties, according to Joi Mar, an analyst with Newport Beach, Calif.-based research firm Green Street Advisors.
“In industrial, we like Western coastal markets like Los Angeles, Orange County, Oakland-East Bay and San Diego. These markets have strong demand (partially driven by e-commerce), land is scarce [and] building is expensive, and there is lack of supply, which all leads to better NOI growth,” says Mar.
