What big real estate trends are being seen in the market now, where are they going and what opportunities are they creating for commercial real estate investors?
It’s easy to make predictions, but now that we have one foot in 2014 what’s really going on?
Coworking has exploded in popularity over the last couple of years thanks to new startup activity and businesses seeking to minimize overhead. According to the National Association of Industrial and Office Professionals Workplace Innovation (NAIOP) the U.S. now leads in coworking spaces with 781 centers as of 2013.
From 2012 to 2013 membership in these spaces is reportedly up 117%. As entrepreneurs and large corporations discover the diverse range of additional advantages of leveraging coworking spaces membership could explode even further.
New real estate specific crowdfunding portals are being launched rapidly in order to capitalize on the trend, respond to JOBS Act developments and fill the void between opportunity and traditional funding.
Among these new industry platforms are Fundrise, Realty Mogul, Crwd.com, and RealtyShares.
A survey of global commercial real estate investors in 2013 showed over 70% planned to build on their portfolios in 2014. According to Beech Street Capital’s new survey almost half of multifamily housing investors plan to grow their holdings in 2014. Capital One Bank’s head of commercial real estate seconded this, saying demand for acquisition financing in this sector was up. Over 40% of survey respondents also expected renovation activity to rise with some investors adding value to existing holdings and others buying and improving existing buildings.
Even though primary gateway cities may be being traded for secondary ones by investors seeking better growth and returns multiple publications and new books are proclaiming that walkability is one of the hottest trends of the moment.
There are a number of reasons for this including environmental awareness, individuals minimizing expenses, desire for better work life balance and the age of new home buyers and those entering the workforce. Plus of course cities want to squeeze in all of the tax revenue they can and maintain density in order to protect their own profit margins.
This is leading to renewed exploration and development of mixed used retail and rental apartments, live-work units, and compacting the space between industrial, office, retail and residential space.