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.
Data Centers, once considered an inflexible asset for global enterprises, are now a cornerstone of the information economy, and $100 billion has poured into the asset class over the past decade, according to Cushman & Wakefield’s global Data Center Market Comparison. This study evaluated 1,162 data centers around the world, utilizing a unique weighted methodology to rank 38 global markets and arrive at an overall top ten. Key emerging data center markets are also identified.
The U.S. economy ended the year on an optimistic note. Businesses continued to add jobs at a healthy clip. Employment in the key office-using sectors increased by 150,000 jobs in the fourth quarter. Consumer confidence remains high. Wages are rising faster than inflation, yielding extra spending power, reflected in the 18.8% increase in online shopping over the holiday season. The industrial market finished strong absorbing 68.8 msf in the Q4, the most space in a single quarter last year.
Medical office buildings and other outpatient care settings have been hot commodities in commercial real estate investment for the past several years. Legacy investors are doubling down on the sector, while new investors are competing for the limited product supply. What does that mean for 2020?