GSA Proposed Budget Seeks $1.5B for Real Estate Investments

The U.S. General Services Administration (GSA) released its 2017 Annual Budget Request, which includes $1.5 billion in investments to federal infrastructure and modernizing the federal government's most at-risk legacy IT systems. The GSA announced last month that the budget request would include $1.4 billion in Department of Justice and GSA funding for the FBI headquarters, but the newly released budget reveals more specific real estate investment plans. GSA's request includes:

— $759 million to support consolidation of FBI Headquarters function into a single, secure campus supporting the FBI's national security and law enforcement mission
— $267 million to deliver a new headquarters for the Federal Emergency Management Agency (FEMA)
— $248 million to support the second and final phase of the Calexico West Land Port of Entry modernization and improvement project
— $81 million for the renovation of the 985 Michigan Avenue Federal Office Building (aka Patrick V. McNamara Federal Building) in Detroit, MI

"The President's budget includes investments necessary to further strengthen our nation's real estate portfolio while promoting development in communities across the country," said GSA Administrator Roth. "GSA will also be able to more effectively bring federal IT systems into the 21st century. Once enacted, GSA will be positioned to better provide the services and solutions that allow the government to more effectively tackle our shared challenges."

To read the full Congressional Justification for the 2017 Annual Budget Request, click here. For more news and information visit Blumberg Partners.

NYC Sees Largest Property Values Increase Since '08

New York City's city tax assessors are on the front lines of a resounding boom in the market, with current property values marking the largest increase since the tax year ending in June 2008. Josh Barbanel from the Wall Street Journal wrote an article about the trillion-dollar city, where the total market value of taxable property rose to $1.072 trillion for the fiscal year beginning July 1, a 10.6% increase from the $969.4 billion reported this year. The most valuable office building, according to the new data, is the Bank of America Tower on West 42nd Street at Sixth Avenue valued at $1.7 billion. The most valuable mixed-use building was Time Warner Center at Columbus Circle valued at $2.02 billion.

"This year's tax roll is simply a reflection of New York City's growing real estate market," said Jacques Jiha, commissioner of the NYC Department of Finance. "We know revenues will not continue at this pace, so we must continue to maintain strong reserves to protect the City's fiscal health," added Amy Spitalnick, a spokeswoman for the city's Office of Management and Budget. For the city, the strong property values could mean hundreds of millions in additional tax collections on top of the $23.5 billion forecast for the fiscal year beginning in July in the city's November 2015 Financial Plan.

For more news and information visit Blumberg Partners.

CoStar: REITs Will Be Big Sellers in 2016

CoStar Group has reviewed over 80 year-end and fourth quarter earnings reports, along with 2016 outlines, for publicly traded REITs and is projecting a majority of the nation’s publicly traded REITs and real estate companies expect to be big sellers of properties this year, according to a new article. With three times as many REITs projected to be net sellers compared to net buyers, the reviewed companies have disclosed an expectation to sell more than $20.7 billion in properties this year, while only anticipating $9.8 billion in acquisitions.

"Even though the year started with choppy financial markets, we continue to benefit from a very strong real estate market and we expect 2016 to be another very good year," said Bill Hankowsky, chairman, president and CEO of Liberty Property Trust, citing "strong demand from the investment buyer universe."

"Our overall disposition efforts have resulted in a significant reduction of our non-core holdings in Pennsylvania, New Jersey, Delaware, Richmond and Northern Virginia," stated Gerard Sweeney, Brandywine Realty Trust's president and CEO. "In addition, these transactions significantly increase our financial capacity, reduce debt and provide ample liquidity for our development pipeline."

"We expect to complete, including the pending investments announced today, between $750 million to $1 billion of total real estate investments in 2016, subject to favorable capital market conditions," said John Thomas, president and CEO of Physicians Realty.

For more news and information visit Blumberg Partners.

CCRSI Price Indices Reflect Strong Year in the CRE Market

CoStar Group has released its year-end Commercial Repeat-Sale Indices (CCRSI), which showed double-digit price growth at the end of 2015 in all regional and property types across the U.S. commercial real estate markets. The CCRSI provides the market's first look at December 2015 commercial real estate pricing, noting that "improving CRE fundamentals, surging investor demand and liquid capital markets propelled the CCRSI composite indices upward in 2015. Demand for core property assets was especially strong." An excerpt from the summary follows:

December transaction activity remained true to its seasonal pattern observed over the last several years, spiking in the final month of the year as investors raced to close transactions prior to year-end. The December composite pair volume of nearly $18 billion was the highest monthly total on record, helping lift total 2015 volume to $128.3 billion, a 26.2% increase from the previous peak reached in 2014.

While pricing in core U.S. markets set records in 2015, investors moving out on the risk spectrum in search of higher yields resulted in equally strong sales activity in non-core markets and property types, as reflected in the equal-weighted U.S. Composite index. Heavily influenced by lower-value properties typical of those in secondary and tertiary markets, the equal-weighted U.S. Composite Index rose 12.6% in 2015 and is now within 3.4% of its previous high water mark.

To review the CCRSI and accompanying graphs, click here. For more news and information visit Blumberg Partners.

Beige Book Looks "Expanded, Upbeat" for 2016 CRE

The Federal Reserve has released the latest Beige Book, summarizing how the economies in the Fed's 12 districts are performing, which finds that the reporting districts are "generally upbeat." With respect to real estate, the data indicated that activity was generally improved over the last Beige Book, with stronger activity cited for multifamily construction and commercial real estate. Overall, most districts reported that loan demand grew, credit quality improved, or loan delinquencies fell, with credit standards changing little. An excerpt from the summary follows:

Most reporting Districts characterized nonresidential real estate activity as modest to moderate; Boston and New York indicated little change. Rental rates rose in more than half of the reporting Districts, and vacancy rates were mixed. Most Districts reported modest or moderate growth in commercial construction, and the Dallas District noted high levels of industrial construction in Dallas-Fort Worth. Contacts in the Atlanta District expect construction activity to increase slightly, while contacts in the Philadelphia, St. Louis, Minneapolis, and Richmond Districts expect overall commercial real estate activity to continue to strengthen at least modestly.

To read the full January 13, 2016 Federal Reserve Summary of Commentary on Current Economic Conditions by Federal Reserve District, click here. For more news and information visit Blumberg Partners.

Avison Young Releases 2016 CRE Forecast

Avison Young has released its 2016 Canada, U.S. and U.K. Forecast, suggesting that stakeholders "will need to keep a global perspective, stay abreast of changes in the broader environment and, increasingly, devise innovative solutions to complex problems." The company's annual report looks at commercial real estate markets in 55 metropolitan regions in Canada, the U.S. and U.K., analyzing activity from 2015 and prospects for the year ahead. For the U.S. office markets, Avison Young saw overall vacancy declined 60 bps year-over-year to 12.4%, in 2015, with all but six markets recording lower rates when compared with year-end 2014. At year-end 2015, the amount of office space under construction in the U.S. had increased to almost 86 msf (52% preleased), up from 68 msf one year earlier; however, according to Avison Young, there is no real threat of oversupply in the near term.

Avison has forecast "modest improvement" in the U.S. office vacancy rate in the coming year, noting that absorption may be tempered by tenants shifting to smaller and more efficient footprints. "From an occupier perspective, we have seen a slight decrease in capital deployment, primarily related to economic uncertainty, and the occupier tendency toward risk aversion, shorter leases and optimization of space usage may continue in 2016,"said Earl Webb, President, U.S. Operations for Avison Young.

To read the full Avison Young forecast, click here. For more news and information visit Blumberg Partners.

2016 AFIRE Foreign Investment Survey

The Association of Foreign Investors in Real Estate (AFIRE) has released its 24th annual survey of members which shows that 64% of respondents say they expect to have modest or major increases in their investment in US real estate in 2016, with another 31% indicating they expect to maintain or reinvest their investments. According to the survey, none of the members, who are among the largest international institutional real estate investors in the world and have an estimated $2 trillion or more in real estate assets under management globally, have plans for a major decrease in the US commitment. The survey was conducted in the fourth quarter of 2015 by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business.

"The investment opportunity is the United States, itself," said James Fetgatter, chief executive of AFIRE, in a press release. "The real estate fundamentals are sound; the economy continues to remain strong; there are opportunities across all sectors of the real estate spectrum and in both gateway and secondary cities. The recent legislation bringing welcome relief from certain FIRPTA taxes should provide additional incentives for foreign investment into the US. In an environment that is regarded both as the safest and most secure in the world, with a strong currency and the best opportunity for capital appreciation, the US is the safest harbor."

Highlights of the AFIRE survey include:

• 60%t of respondents said the US was the country providing the most stable and secure real estate investments. By comparison, Germany, which came in second, had only 19% of the vote.

• With 46% of the vote, the US was also cited as the country providing the best opportunity for capital appreciation. Brazil, second in this category, received 17% of the vote.

• 85% of respondents said their perspective on the viability of the US real estate market was unchanged over last year, although 80% of respondents said it was "very" (35%) or "somewhat" (45%) difficult to find attractive US real estate investment opportunities.

To reviews graphs of the survey data, click here. For more news and information visit Blumberg Partners.

Latest CoStar Reports Shows Ideal Conditions for CRE Growth

CoStar has released its Commercial Repeat Sale Indices (CCRSI) for the month, looking at figures for commercial real estate pricing, which reflects continued price growth in Q3. Steady employment growth, low interest rates, and the global uncertainty that has pushed capital into 'safe-haven' investments helped drive continued investment and price growth, with real estate investors continuing to push activity. According to the CCRSI, composite pair sales volume of nearly $91 billion in the first three quarters of 2015 grew 32.8% compared with the first three quarters of 2014, and put 2015 on track to become the strongest year on record for transaction volume.

Some excerpted hilights follow:

STEADY GAINS SEEN IN OFFICE SECTOR.
The core gateway markets continued to do well during the third quarter of 2015. In addition, former housing-bust markets such as Atlanta and Miami, which have so far lagged in the recovery, also saw some of the most pronounced improvements in market fundamentals and price growth in the last year. The national U.S. Office Index increased 2.7% in the third quarter of 2015 and 10.3% in the 12-month period ended September 2015. The Prime Office Metros Index advanced by an even stronger 12% in the 12 months ended September 2015, propelling it to within 1.2% of its prior peak level.

INDUSTRIAL MARKET PRICE GROWTH HIGHER OUTSIDE PRIME METROS.
The industrial sector's solid fundamentals performance has supported price growth of 2.6% in the third quarter of 2015 and 10.9% in the 12 months ended September 2015. The Industrial Index is now within 6.3% of last cycle's peak. The Prime Industrial Metros Index has generally mirrored that of the broader market. Although its 7.7% increase in the 12 months ended September 2015 was lower than the national Industrial Index, and the Prime Industrial Metros Index remained 15% below last cycle's peak. This suggests more room for price appreciation as rents continue to rise, but space markets are expected to become increasingly competitive as construction levels increase.

To read the full report, click here. For more news and information visit Blumberg Partners.

Sara Investment Buys Former Airplane Factory

Sara Investment Real Estate announced this week that it had completed the purchase of the Crown/Frost buildings in the Crown Center complex in Northeast Minneapolis, a former factory where airplane components were manufactured in WWII. Hillcrest Development sold the fully leased portfolio to Sara Investment for an undisclosed amount.

"We are excited to expand our presence in the Minneapolis market," said Traci Dalsin, President of Sara Investment Real Estate, headquartered in Madison, Wisconsin. "This is a very special property in one of the most desirable areas of the city. Northeast Minneapolis has it all – creative development, entrepreneurs and lots of positive momentum. We’re delighted to be here."

The portfolio includes:

Frost Building at 1209 Tyler Street NE, a 40,000 square foot building redeveloped by Hillcrest in 2009; major tenants include Modern Survey and Dogwood Coffee Co.

Crown Center at 1331 Tyler Street NE, a 140,000 square foot multi-building complex, also renovated in 2009 for $8 million; tenants include Tactile Systems Technology, Blu Dot Furniture and Bauhaus Brew Labs.

1515 Central Avenue NE, a 100,000 square foot trio of buildings acquired by Hillcrest in 2012 and also renovated; tenants include Sociable Cider Werks and architectural firm James Dayton Design.

For more news and information visit Blumberg Partners.

CBRE Says US a Top Target for Asian Investment

A new report from CBRE Capital Markets indicates that activity from Asian outbound commercial real estate investment has picked up in the United States, with research from the company showing that numbers surged to $8.6 billion in the first quarter of 2015. Russell Ingrum, Vice Chairman, CBRE Capital Markets, commented: "The U.S. firmed as a favorite investment destination for Asian investors, weighted with the closing of some high profile trophy deals. Asian investors are also seeking assets across the size, quality and risk spectrum. We saw strong demand from Chinese-based developers in the lower price brackets particularly along the West Coast. This economically vibrant area is particularly attractive due to its proximity to Asia and its familiarity to investors – there is a large Asian population and many investors went to school in this part of the world, have friends or relatives, or vacation here."

"Asian outbound investment enjoyed a strong start as a number of key deals stretched into the quarter, but we also saw under bidders moving on to alternative deals that kept the numbers buoyant," added Marc Giuffrida, Executive Director, CBRE Global Capital Markets. "Based on our work levels, we expect to see growing interest in opportunities within Germany, while in UK regional areas this could be in office, retail and logistics. They are being drawn by the higher real-time yields, and we are now seeing rental growth. As growth is coming back to Europe, we foresee opportunities in commercial development as an alternative to buying core office buildings. Perhaps the most interesting area for growth is underway in the alternative space such as student housing, as well as health and aged care. The latter are two strategic areas where given the rapid shift in elderly demographics in Asia and around the world; we can expect the acceleration of patient capital providers from insurance groups and conglomerates."

For more news and information visit Blumberg Partners.

DTZ Global Office Cost Report

DTZ has released its 18th annual Global Office Thermometer, a report that reviews worldwide office markets and measures the cost of office occupancy on a workstation basis in 138 cities. According to the report, international occupiers are benefiting from significant falls in workstation occupancy costs. Globally, the average annual USD cost of occupying a workstation fell by 3.9% in 2014, reflecting a sharp depreciation of local currencies against the US dollar, and slower economic growth in Europe and increased supply in emerging markets.

"Broadly, declining occupancy costs reflect the sharp depreciation of local currencies against the U.S. dollar, slower economic growth in Europe and increased supply in emerging markets," said Steven Quick, DTZ Chief Executive, Global Occupier Services. "Additionally, occupiers are reducing costs by using space more efficiently in many cities. International occupiers will continue to benefit from ebbing cost pressures in several markets. Overall, we expect global occupancy costs to increase just 0.5% over the next two years."

DTZ projects occupancy costs in most major U.S. cities to moderate in 2015 and 2016. To read the full DTZ Global Office Thermometer, click here. For more news and information visit Blumberg Partners.

Rexford Industrial on SoCal Market

Kelsi Maree Borland of GlobeSt.com conducted an exclusive interview with Howard Schwimmer and Michael Frankel, the co-CEOs of Rexford Industrial, to discuss their firm's recent transactions in Southern California and their current take on the industrial market. Just this month Rexford announced the acquisition of two industrial properties for $15.4 million, another two for $29 million, along with first quarter financials which reported the Q1 acquisition of four industrial properties, totaling approximately 432,000 square feet, for an aggregate cost of $52.4 million. An excerpt of the Q&A follows:

GlobeSt.com: Are there markets within Southern California to which you are particularly attracted?

Frankel and Schwimmer: Well, 70% of our portfolio is located in L.A. and Orange County, but we are looking for opportunities in all of the markets that I mentioned. We do have a higher concentration in the San Fernando Valley, where we have close to 3 million square feet of our portfolio. That market has been a good performing market for us.

GlobeSt.com: As you mentioned, this is a very competitive industrial market and you are focusing on high barrier to entry areas. How are you finding and winning deals?

Frankel and Schwimmer: Today, a lot of the deals that we do have a value-add component to them, and a lot of times we see things that a lot of other buyers don’t. We have three licensed contractors on our staff, so we are always looking at how to create value, and in doing so we are often able to secure the deal ahead of other buyers because we are able to create stronger cash flows.

GlobeSt.com: Where do you see the Southern California market over the rest of the year?

Frankel and Schwimmer: I think it is going to continue to be strong from a fundamental standpoint, with high occupancy and growing rental rates and property values. It is a huge market and it is very fragmented in terms of ownership, so there is always a lot of opportunity in terms of buying assets, whether they are core deals or value-add. We are excited about the market, and we think there is still a lot of opportunity on the rental side in terms of the product that we focus on, and our ability to grow rents in the product that we are buying.

For more news and information visit Blumberg Partners.

CBRE's Investor Intentions Survey 2015

CBRE has released the results from the CBRE North America 2015 Investor Intentions Survey which reflects a confident market with half of the survey respondents indicating that they expect their purchasing activity to increase in 2015, and of those one-third said they plan to raise investment volumes by 20% or more. Investors identified increased competition and the challenge of finding appropriately priced assets as the greatest—and only—obstacle to investment in 2015.

"The strength of the economy creating real estate demand, improved property fundamentals and measured supply gains make North America extremely attractive, with investors maintaining a hungry appetite for real estate assets. As was the case in 2014, a majority of investors intend to increase their property acquisitions in 2015. A natural consequence of this appetite for real estate assets is the competitive investment environment," said Chris Ludeman, Global President, CBRE Capital Markets.

Investors remain interested primarily in industrial, office and multifamily product, with industrial leading the charge. Industrial is the preferred property type for investors in 2015, with one-third of survey respondents selecting either of the two industrial categories as their preferred sector.

To read the full survey findings, click here. For more news and information visit Blumberg Partners.

Q1 in U.S. Office Market

CoStar data shows that several of the 54 largest U.S. office markets posted negative net absorption in the first quarter, which is the one area that CRE analysts will be tracking carefully in coming months. According to the group, the first three months of 2015 provided another 'feel good' quarter for the U.S. office market as office rent growth and elevated leasing and development activity continued to reflect strong fundamentals as brisk business activity and growing confidence in the broader economy encouraged business to lease space and investors to acquire office buildings. An excerpt from their reporting follows:

"While we still expect healthy overall growth in both 2015 and 2016, we view the office market as returning to a balance between supply and demand and also between tenant and landlord strength," said Walter Page, CoStar Group, Inc. Director of U.S. Research, Office.

CoStar analysts expected a slow down in net absorption during the first quarter after the strong 33 million square feet of net absorption in fourth-quarter 2014. However, the lower-than-expected level of absorption for first-quarter 2015 is somewhat concerning, especially because the slowdown appeared to impact other property types, Page said.

Net absorption fell below the net rate of new office building completions for the first time in five years during the first quarter. The narrow spread between newly delivered supply and occupancy demand resulted in a flattened vacancy rate of roughly 11.3% in the quarter in CoStar Portfolio Strategy's national index of the 54 largest U.S. metros.

For more news and information visit Blumberg Partners.

Miami's CBD Office Market

The Miami Downtown Development Authority (DDA) has released its findings on the latest data for the Miami market, finding that vacancy rates continue to decline with Brickell's vacancy rate at about 15% — down from roughly 24.6% since 2011 — and the CBD posting a 20% vacancy rate — down from over 23% at the height of the recession. Vacancy remains relatively high in the Miami DDA Office Area, it is well off its peak and we have experienced strong positive net absorption during several consecutive quarters, according to a GlobeSt.com report.

So, the question is this: What are the aspects about Miami's CBD and office buildings that continue to attract tenants?

"Since becoming active here in 1982, the evolution of Miami's CBD has been intriguing," Donald Cartwright, senior vice president of JLL, tells GlobeSt.com. "Having personally moved from the suburbs to the Miami CBD, I have a great appreciation for the unique urban 'live, work and play' environment that continues to get better with world-class retail, dining, cultural and recreational venues."

Steady and growing positive net absorption has fueled a rapid recovery of the office market in the last three years. Although challenges remain, there are still plenty of new market entrants, expansions and relocations to Downtown Miami's office market.

"Combined with the weather and waterfront orientation which the city has always been known for, Miami's appeal continues to shine," Cartwright says. "However, buildings and amenities alone do not create demand for tenants. There must be a compelling business reason for companies to operate offices here, and Miami's CBD certainly delivers."

To read the DDA 2015 Greater Downtown Residential Real Estate Report, click here. For an interactive map of active developments in Miami, click here. For more news and information visit Blumberg Capital Partners.

IRR 2015 CRE Outlook

Integra Realty Resources (IRR), the largest independent market research and commercial real estate valuation and counseling firm in North America, has released its Viewpoint 2015 report, which reveals projections for commercial real estate in 2015 across all property types. In total, IRR expects real estate values to appreciate across all markets, with improved property fundamentals continuing to drive positive yields and attract additional capital to the sector.

"With our independent position in the marketplace, in IRR Viewpoint we have been able to create an incisive and unbiased report that the industry relies on year after year as a primary resource for research and analysis of the commercial real estate industry in the United States," said John Albrecht, CEO of Integra Realty Resources. "This past year we also completed the largest technology investment that IRR has ever made, giving us even more advanced capabilities to research local and national markets and provide our clients with the benefits of our industry-leading expertise on commercial real estate assets."

Key findings of IRR Viewpoint 2015 for the office market include:

• The office property sector continued its relatively steady recovery in 2014, though the sector lags behind other property sectors in the latest national recovery cycle. More local office markets -- both Central Business District (CBD) and Suburban -- are now mired in the recessionary phase and many more are just beginning a recovery.
• After decades of suburban corporate campus building, a key national trend is the return to new CBD construction, as today's younger workforce wants tech-driven office spaces in populous areas. While developers and investors seemingly prefer the CBD office property sector, property fundamentals for the Suburban office sector strengthened just as much as those in the CBD sector nationally in 2014.
• Recent changes in stabilization expectations reversed the trend from the previous few years and now indicate that the Suburban office sector nationally is more likely to stabilize before the CBD sector, albeit at materially lower rental rates and marginally lower occupancy rates.
• 2014 was another robust year for transaction volumes, with most cities experiencing strong volume increases over five-year historical averages. Activity was notably strong in Cincinnati, Boston, Jacksonville, San Francisco, and Philadelphia; transaction volumes were down only in a handful of cities, including Pittsburgh, Seattle, Cleveland, Hartford, and Richmond.

A free download of the report is available here. For more news and information visit Blumberg Capital Partners.

Technology's Impact on CRE

The Baltimore Business Journal published an article today titled "5 ways technology is overhauling commercial real estate" in which author Alex Kopicki, co-founder and CEO of Kinglet, examines the major intersection between traditional commercial real estate and the fluid technology industry that will affect the way brokers and clients do business. Kopicki's Top 5 list follows, with excerpted commentary:

Mobile takeover
There were 1.75 billion smartphone users in 2014, according to market research firm eMarketer. Not only is that a lot of devices and users, but that's also a lot of time spent on these devices. So what does this mean for commercial real estate professionals? Quite simply, if your company doesn't have a mobile strategy, you better get one — quick.

A new way to work
The number of co-working facilities across the globe has nearly doubled every year for the past five years. Small Business Labs projects that more than 12,000 global co-working spaces will exist by 2018 with over 1 million members. The convenience of short-term rentals, the attraction to community, the hip-to-be-small attitude and new business formation are all positive trends that will lead to the continued growth of co-working facilities.

Big data
While data can't predict the future just yet, big data can tell us the probability of future decisions, which can lead to actionable decision-making. If you are a commercial leasing agent, a landlord or a service provider, what touch points are you recording about your clients? And what can they tell you about your effectiveness?

Crowdfunding
Today accredited and non-accredited investors, through a multitude of platforms, have the ability to invest in early-stage companies. What this means for commercial real estate is that everyone's customer base broadens as fractional "ownership" increases. It also results in more capital outlets and providers for a more competitive landscape. Let the games begin.

The Internet of Things
This is a simple concept; it's all about connecting everyday devices such as your home thermostat to the Internet. Why would you do this? The better question is: Why would you not do this? More connectivity leads to more control and customization, leading to more convenience. For example, if I'm a leasing agent who can unlock a space for a showing with my phone, I'm going to be able to access spaces for customers after hours or even show spaces on a whim— no keys required. The Internet of Things is digitizing more data and connecting environments in commercial real estate that were previously fragmented.

For more news and information visit Blumberg Capital Partners.

Preferred Office Locations

NAIOP, the trade association for developers, owners and investors in industrial, office and related commercial real estate, hosted a webinar with Emil Malizia titled Preferred Office Locations: Comparing Location Preferences and Performance of Office Space in CBDs, Suburban Vibrant Centers and Suburban Areas, which shines a light on location preference when picking an office location. The study, which combines expert opinion and accurate property-level data, provides reliable information about emerging location preferences across major U.S. office markets and the comparative performance of office space in CBDs, suburban vibrant centers — defined as amenity-rich, mixed-use, "live, work, play" locations — and typical single-use suburban areas.

The study sought to address five questions:

1. Do office tenants prefer CBDs to suburban areas?

2. Do office tenants prefer suburban vibrant centers to typical single-use suburban environments?

3. Are office properties in CBDs performing better than those in typical single-use suburban office areas?

4. Are office properties in suburban vibrant centers outperforming those in typical single-use suburban office areas?

5. Are suburban vibrant centers preferred to or performing better than CBDs in their market areas?

Overall, office tenants showed no strong preference for either downtown or suburban locations. The study did, however, reveal a clear preference for suburban vibrant centers over typical single-use suburban office environments, and demonstrated that office properties in suburban vibrant centers are outperforming those in typical single-use suburban office areas on almost all metrics.

To download and watch the webinar, click here. For more news and information visit Blumberg Capital Partners.

CushWake Q2 Report Reflects Strong Industrial Growth

Cushman & Wakefield released its Marketbeat Snapshot reports for Q2 of 2014, which shows the economy not only growing at an annual rate of 4% but industrial production, which correlates highly with industrial demand, advanced at an annual rate of 5.5% in the second quarter of 2014. An excerpt from the report follows:

With vacancy rates and speculative construction back to per-recession levels, the U.S. industrial sector continues to lead the country's commercial real estate recovery. Strong occupancy gains and dwindling supply of big-box drove the overall vacancy down to 7.6%, 80 basis points lower than a year ago and the lowest level since first quarter 2008. This also represents a significant drop from the recent high of 11.2% posted during first quarter 2010. Net demand remained strong during the second quarter and is on track to surpass last year's total, with 95.7 million square feet of occupancy gains at mid-year. Atlanta is leading the nation, with 8.9 million square feet of space absorbed to date followed by Inland Empire with 7.5 million square feet. Healthy demand led to increased occupancies in almost every major market with only 12 of the 78 markets tracked posting net loss in occupancy at mid-year.

For more news and information visit Blumberg Capital Partners.

Report Shows Healthy Outlook for CRE Markets

A new report from Auction.com was released this week, Q2 2014 Commercial Real Estate (CRE) Market Monitor Report, which reflects year-over-year growth in all major sectors as real estate transactions trend in a positive direction with volume and pricing moving upward. According to the report, the total combined commercial volume in the office, retail, apartment, industrial and hotel sectors reached $81.6 billion in the second quarter of 2014, up nearly 14% from one year ago. Office and apartment transactions combined to account for more than 55% of the five-sector total, similar to one year ago, though the apartment sector's portion of that volume has shrunk. Meanwhile, retail transactions made up 16% of the total.

"The picture continues to brighten for the commercial real estate market, as more investors take advantage of the current low-interest rate environment and drive transaction volume and pricing upward across all of the major sectors," said Auction.com Executive Vice President Rick Sharga. "Even the sectors that are beginning to level out in terms of transaction growth are performing better than they have in the past five years."

Additionally, pricing is on a steady upward trend across all sectors, with industrial pricing leading the way in terms of gains. A 15% year-over-year increase in May 2014 elevated the industrial sector's price growth to second among the sectors -- right behind hotel, which has averaged between 15 and 20% year-over-year growth since June 2013. The retail sector saw a surge in price growth in 2013, similar to what industrial is experiencing now, but year-ago gains have begun to decelerate in recent months as the sector continues to face headwinds including the rise of online shopping and shrinking space needs per customer.

For more news and information visit Blumberg Capital Partners.