Last year, Buildout and theBrokerList teamed up to highlight the biggest commercial real estate trends over the past year, based on survey results from CRE Brokers across the country. This year, the results will be benchmarked against last year’s findings to highlight trends within the industry.
The 2015 survey results highlighted some interesting trends. For example, in 2015 respondents said 52 percent of the properties sold were retail and office space, brokers across the U.S. said they spent most of their time in the role of seller rep and 71 percent of those surveyed said relationships were the biggest stimulus for winning business.
2016 was a year full of surprises, from sweeping changes in government, both domestic and abroad, to the increased adoption of technology breaking the online sales record with $3.34 billion spent on Black Friday. These changes have had big impacts on the commercial real estate industry, and we’ll likely see those changes in the 2016 DNA of #CRE Survey results.
The three areas we think are most likely to change:
Last year, retail accounted for 26 percent of all properties sold. But, as we mentioned above, online shopping is becoming more dominant, hence the 17.7 percent increase year-over-year in online shopping on Black Friday alone. With more shoppers adopting this form of shopping, the retail property market has been unloved by many investors with deal activity in the first three quarters of 2016 down 13% from the same period a year earlier according to Real Capital Analytics.
While retail appears to have had a rough year, multifamily is on the up. In 2015 multifamily property sold/leased only accounted for 10 percent of transactions. According to JLL, as of Q3, multifamily investment was up 8.2 percent year to date. A broad demographic is moving back into urban cores for a “work/live/play” lifestyle. While this is spurring higher-end multifamily development, rents are outstripping incomes in many communities.
International capital saw its highest investment in U.S. commercial real estate in 2015, and with factors like Brexit and slowing growth in China there is still abundant non-U.S. capital looking for placement and very strong demand for U.S. assets in 2016. In 2015 only 1 percent of most brokers business came from international sources, and we anticipate that brokers will have seen an uptick in 2016.
The survey takes less than five minutes to complete, so if you haven’t already, take the survey Here.