Article by Chris Macke, The CoStar Group, April 12, 2011
First quarter commercial real estate market fundamentals in 2011 continued their improvement over 2010. This will come as no surprise to anyone who understands that commercial real estate demand is derived from activity in the overall economy. As the economy goes, so go commercial real estate fundamentals.
When looking at the change in economic indicators outlined below, the continued improvement makes sense. Consider the following:
Article by Randy Drummer, CoStar Group, April 6, 2011
Tightening Supply In Suburban Markets Will Eventually Benefit Owners and REITs as Tenants Trade Up For Higher-Quality Space at Attractive Rates
Picking up where they left off last year, U.S. equity REITs continued to post strong returns in the first quarter of 2011, outperforming broader market indices despite a late-quarter slowdown that softened returns on investment trust stocks in March, according to new figures from NAREIT.
The gains appear to reflect investor expectations that market fundamentals will continue to improve across all sectors of commercial real estate — including an anticipated deepening of the nascent office sector recovery to include suburban and some second- and third-tier office markets assets.
The FTSE NAREIT All Equity REITs Index, which covers 120 investment trusts with an implied market capitalization of $417.7 billion, rose 7.50% in the first quarter, easily outpacing the Standard & Poor’s 500, which rose at 5.92% in the first three months.
Article by Matt Hudgins, NREI Contributing Writer, January 12, 2011
Blockbuster transaction volume in December helped to push U.S. commercial real estate sales to $115 billion for 2010, up 109% from $54.6 billion in 2009, according to preliminary results from Real Capital Analytics. December’s volume of more than $21 billion was the highest sum for a single month’s trading since the end of 2007.
“I think the recovery in transaction activity has snuck up on everyone,” says Dan Fasulo, managing director at Real Capital Analytics. The New York-based research company will publish its findings on December transactions later this month in its Capital Trends Monthly report.
Article by David Bodamer, Retail Traffic, December 14, 2010
Investors searching for distressed big-box deals are facing competition from an unlikely source — retailers. Large tenants including Wal-Mart, Target, Kohls Department Stores and others have become aggressive bidders in the market for vacant big boxes. The retailers are buying distressed space from owners or banks, often at prices that are 20% to 30% higher than real estate investors are willing to pay.
As a result, retailers have become large players in the single-tenant market.
An article by Mark Heschmeyer, The CoStar Group, December 8, 2010
Reversing two months of increasing commercial real estate prices, all three of CoStar’s “headline” Commercial Repeat-Sale Indices decreased in October, continuing the recent see-saw performance of commercial real estate pricing, according to CoStar Group’s newly released Commercial Repeat-Sale Indices (CCRSI).
CoStar’s national all property type index declined 3.88% during October, giving back its 3.07% gain in September. The index representing all commercial properties and the broadest industry measure of commercial real estate transaction pricing, slipped to its lowest point since the index peaked in February of 2008. While still decreasing, the rate decline has begun to slow considerably. Since June of 2009 the rate decline has been reduced by half.
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