Job growth in certain employment sectors is fueling demand for office space, creating the potential for future investment opportunities. Other employment sectors that are historically lower-wage jobs are producing more renters, increasing demand for apartment product, according to the fourth quarter edition of “Insights + Trends + Opportunities” publication compiled by Transwestern and its research affiliate, Delta Associates.
The professional/business services sector saw the most growth in the 12 months ending October 2013, gaining 644,000 net new payroll jobs. On a percentage basis, the mining/logging sector saw the most growth, reaching a 5.5 percent increase in jobs. Investors in office product have responded to the positive trends in office-using employment, with year-over-year national office sales volume rising each month since February 2013.
Additionally, rising interest rates are expected to trigger sale-leaseback and net-lease sale options for investors. Rising interest rates are increasing the cost of capital for owner occupants, which may consider liquidation as a viable option to generate funds.
As many new opportunities come to the forefront of the commercial real estate industry, tenants are beginning to leverage data provided by lease administrators in new ways. Lease administrators go far beyond tracking lease expiration dates and options to advising executives on larger-scale business strategies, as well as saving clients thousands through invoice evaluation.
Development, a viable option for many investors, is getting a face lift of late. Class A buildings are evolving to higher standards, including the type of building, specific design characteristics and location. Features that were traditionally reserved for elegant high-rise towers in high-density downtowns are becoming standard issue on a majority of suburban office projects. This evolution of space means that developers and owners that incorporate elevated standards in office projects will outperform buildings completed as little as five years ago.
Each edition of “Insights + Trends + Opportunities” features an article from Delta Associates analyzing the economy and its impact on commercial real estate, as well as articles from both landlord and tenant representation experts. This quarter, Transwestern also added an article focused on trends in development.
Read the full publication here: http://www.transwestern.net/public/corporate/Insights/4Q2013/Insights_4Q_Media.pdf
Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, development, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. Transwestern facilitates better decision-making for clients by combining penetrating local market intelligence and macro-market research through its affiliate, Delta Associates. Transwestern has 34 U.S. offices and assists clients through more than 181 offices in 40 countries as part of a strategic alliance with Paris-based BNP Paribas Real Estate. For more information, please visit www.transwestern.net and follow us on Twitter: @Transwestern.
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