Jeff Coyne
Director, GRS | Corteq
(510) 962-9534
[email protected]
As GRS Group does frequently, we had a team of professionals at what is always an important annual conference, the recent CMBA Western States Conference, which took place in Las Vegas, for its 20th straight year.
There were several informational and educational sessions at the show, but we want to focus on two specific meetings for which slides were provided.
First off, on a macro level, there was a presentation by Mary Ludgin, of Heitman, that had a lot of promising data, as well as a few concerns.
She pointed out that the industrial market, in no small part due to e-commerce, is having its best year since 2000. Additionally, Ludkin said that the multifamily fundamentals are still strong as well.
However, there is a fear of apartment over-building, as well as too much development in urban cores that will not keep up with perceived demand. This remains to be seen, given population increases and how the overall housing-ownership market shakes out.
This year, across the United States, there is reportedly a 37 percent jump in apartment deliveries, while vacancy rates overall slightly decreased nationwide between 2015 and 2016.
Meanwhile, Christine Cooper, a CoStar economist, broke down the picture in the West and added more information about macroeconomic data.
GDP growth in the entire country increased 1.9 percent between 2010 and 2016, but it was led by the Southwest, up 3.1 percent, while states in the Far West rose 2.5 percent during that time. California and Utah both experienced boosts of 2.7 percent.
From 2015 to 2016, while the United States saw a 1.5 percent overall rose, Washington State shot up 3.7 percent, followed by Oregon, which jumped 3.3 percent.
The commercial real estate industry has been asking for a while now how long this recovery can last and when to expect another downturn.
Even with bumps in interest rates, a volatile presidential administration and international unrest, the United States continues to see GDP and job growth, as well as consistent bumps in consumer confidence. The positives are all bell weathers of a healthy commercial real estate environment.
There is no telling what to derail that situation, such as over exuberant supply, but even a temporary bump in vacancy rates might not equate to an industry downturn.