Industry insights, market outlook reports and commercial real estate
news, and trends from the Coldwell
Banker Commercial brand.
Every industry has its own lingo, but there are some fields that really have a lot of jargon – and commercial real estate is definitely one of those fields. If you don’t have a background in CRE or CRE experience, it’s easy to feel overwhelmed.
It has been said that it is only a matter of time before blockchain, the proprietary technology that supports cryptocurrencies such as Bitcoin, will begin to infiltrate industries worldwide. Believe it or not, even historically traditional industries are not immune to the disruption – commercial real estate included.
Continuing on last year’s success, the industrial market is still facing ever-tightening space on the coasts and in city hubs all across the country. Mainly spurred by the logistical challenges e-commerce creates, the market shrinks.
Vacancy rates are at all-time lows. Absorption rates are at their highest. The “industrial sector has outperformed all other property types with double-digit total returns” according to the Integra Realty Resources 25th annual Viewpoint report covering the commercial real estate industry.
A lot has been made about the in-store shopping trends we are seeing in retail. What has largely been overlooked are the shipping trends shaping the retail landscape this year. Consumers continue to expect faster deliveries for free, which puts enormous stress on retailers at the last mile.
Augmented Reality and Artificial Intelligence (AR and AI) may still be far from standard in CRE, but it’s only a matter of time. High-end firms have already been using these tech tools on a grand scale. Research by Goldman Sachs estimates that by 2025, virtual reality (VR) technology will generate over $2.5 billion in revenue.
Investing in real estate can be a way to earn passive income and increase your wealth. While plenty of investors have success in residential real estate, others make a move to commercial real estate to gain even more money.
As the future of transportation and city development changes rapidly, developers are reevaluating the demand for parking in retail, office, and multi-tenant spaces. The lack of ample parking has been a reality for people living and working in densely populated areas like San Francisco and New York City.
Retail trends have greatly impacted the industrial market for the last few years. Amazon shifted the entire e-commerce industry to lightning-fast shipping, which means that industrial centers and warehouses are being moved to closer-to-the-city locations to handle the load.
Last year, core assets were ranked second highest among investors. This year, secondary metros took that spot. Some argue that the cap rates for core assets and investors looking for assets that produce higher yields are why secondary markets look so much more attractive to investors this year.