Each week, JLL Atlanta presents a roundup of noteworthy commercial real estate stories from a variety of industry publications. Here are five stories that caught our eye recently.
Economy Watch: More Challenges Ahead for Physical Retail by Dees Stribling of Commercial Property Executive.
“The nuance of the matter is that e-commerce isn’t going to threaten all retail sectors equally, or even some much at all. As destinations, many malls still have staying power, and so do many stores. Moreover, shopping is a social activity that transcends mere economic utility. But not for every kind of good: e-commerce has already disrupted a number of categories, such as books, office supplies, electronics, and home furnishings–things that are relatively easy to buy electronically.”
Why I’m Optimistic About CRE For the Next Few Years by David J. Lynn for NREI.
“Real estate fundamentals continue to improve. Balance sheets of most firms have been steadily strengthening, with increasing margins, profitability and top line growth. Most households have recovered their lost wealth and are attaining new highs. Unemployment dropped to a new low. Commercial real estate supply still remains quite low by historical standards with only a few pockets of oversupply in the multifamily sector.
Where Apartment Construction Is Hottest by Diana Olick of CNBC.
“’With respect to multifamily, this corner of the housing industry is certainly seeing robust conditions as rent gains are running at mid single-digit rates,’ said Peter Boockvar, chief market analyst with the Lindsey Group. ‘The apartment vacancy rate as of Q2 was at 4.2 percent, matching the lowest level since 2001, and the homeownership rate of 63.4 percent is the lowest since 1967.’”
Office Today, Apts. Tomorrow: Office-To-Residential Conversions Expanding Across More U.S. CBDs by Randyl Drummer of CoStar.
“A funny thing is happening in downtown markets where empty and obsolete office buildings are being converted into apartments. Companies that wouldn’t consider a downtown location back when the space was available are coming back, drawn by the large number of millennial workers who favor a funky downtown address.”
Construction Sector Trends and Outlook: Economic Impacts of CRE by Kathryn Hamilton for NAIOP.
“Notably, the report says that construction spending for four types — office, retail, transportation (which, in the U.S. Census data set, includes warehouse properties) and manufacturing — has tracked a relatively smooth pattern through each category’s respective growth cycle. Since the bottom of the cycle in 2011, total construction spending for 10 nonresidential building types has increased 14.0 percent.”