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Six Trends in Commercial Real Estate to Watch for in 2016

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Urban Land online has named its top five most popular articles from 2015. What is top on the list? Six Trends in Commercial Real Estate to Watch for in 2015, written by Peter Burley, Director, Richard J. Rosenthal Center for Real Estate Studies, and David Lynn, CEO of Everest HIP.

The co-authors are at it again this year, outlining for readers six trends in U.S. commercial real estate to watch for in 2016. Summarized are the six trends below, but don’t miss out on the full article here:

  1. The global urbanization trend continues in the United States, as it does elsewhere, as boomers and millennials seek enhanced access to jobs and amenities—from shopping to entertainment to health care.
  1. Interest rates will be on the rise—for sure this time—as the Fed move in December demonstrated. Forecasts vary, but the likelihood is that the Federal Funds Rate rises at least to, or above, 1.0 in 2016, with ten-year Treasuries pushing fractionally higher toward the 3 percent mark.
  1. International capital flows into U.S. real estate assets will continue—and increase. Global economic and political uncertainty continues to drive capital to a “safe haven” in the United States.
  1. There will be continued stress on retail and continued retail shifts—including mixed (virtual/physical) spaces and entertainment-themed spaces
  1. Additions to supply will continue to be limited, with only modest supply growth in a few sectors—multifamily (peaking, then slowing slightly late in 2016), student and senior housing (creeping up), and single-tenant industrial (regional/nodal distribution centers)—and repurposing in others (suburban malls and those abandoned Sears and KMart stores).
  1. Last year saw a dramatic drop in oil prices. Increased production and reduced demand due to slowing emerging-market growth have led to a drop in oil prices from $110 per barrel to under $50 per barrel.
1 reply
  1. Don Sherer
    Don Sherer says:

    The probability of rising interest rates in 2016 is modest at best and with each passing day the likelyhood of of lower or negative rates is improving. At this point it is difficult to see the Federal Reserve Bank raising rates three or four times this year.

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