The impact of new development and of the ongoing operations of existing commercial real estate buildings in the United States – office, industrial, warehouse and retail – has grown to support 9.2 million American jobs and contribute $1.14 trillion to the U.S. GDP in 2019, an increase from 8.3 million jobs and a contribution of $1.0 trillion to GDP in 2018. Based on the existing stock of commercial buildings — totaling 49.6 billion square feet at the end of the third quarter of 2019 — direct spending on building operations totaled an estimated $173.0 billion and contributed $464.0 billion to GDP. In addition, 563.3 million square feet of new office, industrial, warehouse and retail space newly constructed in 2019 has the capacity to house 1.4 million new workers with a total estimated annual payroll of $83.5 billion. The findings were presented in the annual study, “Economic Impacts of Commercial Real Estate, 2020 U.S. Edition,” released this week by the NAIOP Research Foundation. The study measures the contributions to GDP, salaries and wages generated, and jobs created and supported from the development and operations of commercial real estate. The study broke out several key measures by commercial real estate industry sector: Click to read more at www.naiop.org.
Houston’s 2020 commercial real estate market outlook is positive with a few challenges in the office sector. The metro’s economy continues to recover from a lackluster energy market amid a general slowdown of global trading; nonetheless, job growth should remain positive through 2020.
Despite global trade stagnation, Port Houston, a major economic driver,
reports increasing volume and value, which should carry over into 2020 to remain among the top ports in foreign and domestic tonnage. Click to read more at www.rednews.com.
The mortgage banking and investment sales pros with Berkadia expect the multifamily sector to remain a strong one throughout 2020. But what could bring at least a minor hiccup to the sector? Interest rates and the presidential election. That’s according to Berkadia’s 2020 Outlook Powerhouse Poll, a collection of insights from more than 150 Berkadia investment sales brokers and mortgage bankers across 60 offices. According to the poll, investment sales brokers and mortgage bankers expect interest rates and the presidential election to have the greatest impact on multifamily investing and financing this year. A total of 86 percent of bankers cited interest rates in the study, while 44 percent pointed to the election. Rounding out the top three expected major trends, 44 percent of bankers cited GSE reform. For trends impacting multifamily investing, 77 percent of investment sales brokers cited interest rates, 63 percent the presidential election and 40 percent debt underwriting. The survey found, too, that 91 percent of mortgage bankers expect GSEs to see the most activity in 2020. Click to read more at www.rejournals.com.
It’s Bat City versus the City by the Bay in a new projection for the growth of office jobs in 2020. Commercial real estate services company CBRE predicts Austin will see a 2.6 percent rise in office jobs this year compared with last year. That puts Austin in first place for anticipated office-job growth in 2020 among U.S. markets with at least 37.5 million square feet of office space. Office jobs include those in the tech, professional services, and legal sectors. Austin edges out San Francisco for the top spot in CBRE’s forecast, published January 9. The company predicts a 2.5 percent increase in San Francisco office jobs this year versus last year. Personal finance website WalletHub recently ranked San Francisco and Austin third and fourth, respectively, on its list of the U.S. best cities to find a job. “It’s not surprising that the forecast for Austin is extremely bright, and we expect that technology companies and professional firms will still drive the demand for more [offices],” Troy Holme, executive vice president in the Austin office of CBRE, says in a January 22 release. Click to read more at www.austinculturemap.com.
WASHINGTON, D.C. (December 19, 2019) – The level of commercial/multifamily mortgage debt outstanding rose by $75.7 billion (2.2 percent) in the third quarter of 2019, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report. Total commercial/multifamily debt outstanding rose to $3.59 trillion at the end of the third quarter. Multifamily mortgage debt alone increased $40.6 billion (2.8 percent) to $1.5 trillion from the second quarter. “Strong property markets, low interest rates and low mortgage delinquencies continue to draw more capital to commercial and multifamily mortgages,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Every major capital source increased their holdings of commercial real estate debt during the third quarter, led by Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA). The growth of investor-driven lenders is also evident, with mortgage REITs on pace to soon become the fifth largest source of capital for commercial and multifamily mortgages.” The four major investor groups are: banks and thrifts; federal agency and government sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS); life insurance companies; and commercial mortgage backed securities (CMBS), collateralized debt obligation (CDO), and other asset backed securities (ABS) issues. Click to read more at www.mba.org.
As my regular readers know, I am a huge proponent of diversification, as I consider it one of the best ways to sleep well at night. However, as we roll into the New Year, I am fielding requests from readers inquiring about the best REIT to own in 2020. So, while I purposely fulfill that request, I must provide the following disclosure, and that is that one of the best ways to mitigate risk is to carefully diversify your portfolio. By diversifying, you provide yourself with insurance that if one stock blows up, it will not severely impact your nest egg. Digital Realty: A Data Center REIT To Own For Decades Digital Realty (DLR) is one of the oldest data center REITs in the world, having gone public in 2004 and as of Q3-19 owned 211 data centers in 35 cities across 14 countries. The company has global exposure represented in North America (77%), Europe (13%), Asia Pacific (7%) and Latin America (3%). Click to read more at www.forbes.com.