2015 Commercial Real Estate Outlook!
2015 is now upon us! As you prepare for the New Year, be prepared to make important decisions concerning your real estate and what effects it may have for your financials and business. To help guide you through these decisions I’ve included a great report from Deloitte, their
Quick 2014 Review: 2014 was a strong year with rental prices rising and vacant space numbers dropping. Heavy inflow of foreign capital has buffed up investment opportunities and sales for US commercial real estate. Banks have also eased lending standards for CRE loans, including in construction.
See below for the highlighted trends I know Raleigh business owners will find useful.
Economy: Even with interest rates expected to rise in 2015, tertiary markets (Raleigh, the Triangle, NC) are going to see MORE CAPITAL as international investment dollars pour in across the USA.
For your compass - Lending will increase, even from regional banks, so capitalize while you can to refinance or get a new loan if interested in purchasing real estate before rates begin to rise.
Development: New office construction is likely to remain low in 2015. Hotel and Multifamily sectors will continue to receive the most construction activity and loans.
For your compass - If you are a Raleigh business looking for more space or a move your best options are not to look for the next office park or tower to be constructed. Instead, search for redevelopment opportunities of existing buildings or refurbishment in your own current building to meet 2015 needs.
Investment: Commercial real estate continues to post strong returns. 2013 was a down year for CRE funds, but investment bounced back in 2014 with Real Estate Investment Trusts (REITS) posting better returns than indices such as the S&P 500.
For your compass - REITS are benefitting from access to more capital and rental growth in their existing building holdings. Unless government regulations interfere, investors should look into local REITS such as Raleigh’s Highwoods Properties (HIW) and Bell Partners out of Charlotte.
As always, whether you are debated a new purchase, relocation or development opportunity let Capital Compass know!
- Capital Compass