• Leasing activity was stable in 2019, at roughly the same volume as in 2018.
• The West region exhibited the strongest leasing activity, with more than 100 million square feet leased for a fourth consecutive year.
• The tech industry once again dominated leasing activity, accounting for 27.6% of the major leases—up from 26.1% in 2018. Tech leasing totaled slightly less than leasing for the financial services, government and real estate combined.
• For a second consecutive year there were more than 25 large leases (over 400,000 sf) signed in 2019.
The speed with which technology is changing makes the creation of a data center strategy a daunting task. Enterprises must decide to stay with their on-premises facility, move to the cloud or pursue a hybrid cloud strategy. Developers and operators require a parcel with robust fiber, access to power and a thorough grasp of the permitting process. Investors must be able to skillfully assess the long-term potential of a data center.
Join Cushman & Wakefield on Thursday, March 5 at 2:00 p.m. CT for a discussion on emerging trends in building/property management.
Overall transaction activity for investments accelerated modestly in the fourth quarter of 2019 to $152.2 billion—up 2% quarter-over-quarter (QoQ). Single asset sales drove the increase, notably deals over $250 million, which rose 35% QoQ and 30% year-over-year. For multifamily, the average annual effective rent growth in the U.S. in 2019 was 2.8%, down 80 basis points from the 2018 average. Rent growth moderation at this mature stage of the cycle is a positive indicator of the health of the multifamily sector.
Innovative sectors such as cell and gene therapies, artificial intelligence and ancestry and genetic testing are all forecast to grow in the next five years, some as much as 37%, driving demand for R&D space, diagnostic centers and healthcare facilities, according to Life Sciences 2020: The Future is Here report.
With a portfolio of almost 170,000 units, Pinnacle is the third-largest multifamily manager in the country.
Cushman & Wakefield has entered into a definitive agreement to purchase Dallas-based Pinnacle Property Management Services.
The forecast for North American industrial absorption in 2020-2021 is a healthy 459.9 msf. Economic indicators, with strong links to industrial fundamentals, point to continued growth in 2020 and 2021. Industrial has been the investors’ darling in recent years, and there is no indication of this love affair coming to an end any time soon. Over the next couple of years, we expect it to remain one of the leading product types to watch
2019 US CMBS issuance was nearly $98B, up 27% from $76.9B in 2018. Annual issuance surpassed expectations after the yield on the 10-Yr UST moved and stayed below 2% in August. With interest rates projected to stay low, 2020 issuance is expected to be consistent with or exceed 2019. Expect a strong first half of the year with some uncertainty in the second half with the upcoming US Presidential election.
INVESTORS MAXIMIZE DIVERSIFYING OPPORTUNITY SET
Investors will opt to diversify to breathe new life into portfolios:
Class A, workforce, Boomer-targeted or other niche segments such as colliding. Class A has made a comeback while renter-by-choice households (earning $100k+) increased from 10-21% of renters in the past decade. The demographic fundamentals and undersupply of “attainable housing” across a broadening income spectrum will amplify demand and drive value.