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Commercial Real Estate Investment Up 45% Year-Over-Year

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After a banner year of CRE investment in 2021, 2022 is off to a solid start.

Reports from both Colliers and CBRE for the first three months of this year found that investment in CRE is up and, by some accounts, setting records.

U.S. transaction volume hit $161B, a first-quarter all-time high, Colliers found. CBRE clocked total transaction volume at $150.4B, which was a 45% increase over the same time the year before.

Volume was up for all asset classes, but unsurprisingly, multifamily took the top spot, capturing $63B, according to Colliers. That amounts to a 56% increase year-over-year and sets a new record for multifamily, according to Colliers.

By CBRE’s count, multifamily also took the lead, but CBRE found it garnered $57B in investment volume, a 42% increase over the previous year’s first quarter. It is common for brokerages to have different numbers based on their research metrics, including size of deals tracked.

Greater New York and greater LA were in the No. 1 and No. 2 spots for transactions, respectively, CBRE found. New York saw $63B worth of deals, while greater LA trailed closely behind with $62B worth of transactions.

Earlier this year, CBRE forecast that even after 2021’s record highs, CRE investment would continue to grow in 2022.

Though interest rates are moving upward and inflation is soaring, these factors haven’t had an impact on CRE yet, Colliers said, though it also noted those would likely be reflected in data later in the year because there is a lag between interest rates being hiked and deal flow effects.

CRE is often called an inflation hedge, and the interest in CRE this year could be seen as confirmation that investors view property as an investment that could withstand the uptick, but now some investors have begun to make moves that indicate they aren’t sure how much longer that will hold true.

 

Source: Bisnow

Florida Has The Top 5 Hottest Metro Commercial Real Estate Markets

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The first quarter of 2022 may have technically been a winter-to-spring transition, but CRE metro markets were particularly hot in the Sun Belt and West, with Florida walking away with the top five out of 16 markets.

That’s according to the National Association of Realtors’ Commercial Real Estate Metro Market Conditions Index. Only one market—Boston—was outside of those regions.

The organization says that the index, which shows relative performance, “is calculated using 25 variables pertaining to the metro area’s economic conditions (job growth, unemployment rate, wage growth), demographic conditions (net domestic migration, population growth), commercial market conditions for multifamily, office, industrial, and retail property sectors (vacancy rate, absorption, rent growth, cap rate, professional/business services, and retail trade job growth) and employment conditions in the hotel/lodging industry (job growth, share of leisure and hospitality workers to total employment)”

An index number for an area above 50 means that market conditions were stronger than a national average while one below 50 means weaker. The index combines upwards of 25 variables, depending on what information is available.

Some of the market variables include changes in non-farm employment and unemployment rate, GDP growth, population growth, changes in apartment rents; rent to income share, new office space leasing, net absorption of office and industrial; and changes in jobs in specific sectors. A score of 80 or above means an area is outperforming on at least 20 out of the 25 areas.

So, for example, Orlando-Kissimmee-Sanford, Florida, the top-rated metro, outperformed the US overall on 21 out of the 25 variables and landed with an 84 index. Wages were up 9%; 10,000 people migrated there from other states; office vacancies were 8% versus 12.2% nationally; multifamily asking rents were up 25% compared to the national 11.4%; industrial vacancy rate was 3.6%  versus 4.1% national; and retail vacancy was 3.8%, where the nation’s average was 4.5%.

That was the only index score of 80 or above. The other top four locations, all in Florida, were Miami-Miami Beach-Kendall (76); West Palm Beach-Boca Raton-Delray Beach (76); Fort Lauderdale-Pompano Beach-Deerfield Beach (72); and Fort Myers (72).

Out of the top 16 markets, the only other state with two entries was Georgia: Savannah (72) and Atlanta-Sandy Springs-Roswell (68). At the bottom of the top 16 was Provo-Orem, with an index of 68.

 

Source: GlobeSt.

Woodmont Beefs Up Palm Beach Park Of Commerce Portfolio With $21 Million Warehouse Deal

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Four months after acquiring a massive development site at Palm Beach Park of Commerce, Woodmont Industrial Partners paid the same seller $21 million for a recently completed warehouse nearby.

An affiliate managed by Eric Witmondt, CEO of the Fairfield, New Jersey-based commercial real estate firm, bought the 212,000-square-foot facility at 15501 Park of Commerce Boulevard in Jupiter. The seller is an affiliate of Atlanta-based TPA Group, records show.

Woodmont Industrial paid $99 a square foot for the warehouse, which is pre-leased to two tenants, a press release states. The buyer obtained a $7.5 million mortgage from Valley National Bank, records show.

TPA recently completed the warehouse after breaking ground last year, the release states. The building has a 36-foot ceiling height clearance, parking for cars and trailers, and a concrete truck court. It was the last Palm Beach Park of Commerce property owned by TPA.

The master-planned industrial park spans 1,300 acres with heavy and light industrial developable land, as well as commercial building sites, according to TPA’s website.

In January, TPA Group sold 116.6 acres at Palm Beach Park of Commerce to Woodmont Industrial for $40.4 million, records show. In a partnership with PCCP and Butters Construction & Development, Woodmont Industrial plans to build eight warehouses, the release states. The first two buildings, spanning a combined 354,390 square feet, are expected to be completed in July 2023.

In a statement, Woodmont Vice President Anthony Amadeo said the firm is “extremely bullish” on Palm Beach County, where the company is building 2 million square feet of industrial space in the next 24 months.

“Woodmont will continue seeking deals to expand its footprint in South Florida’s industrial market,” Amadeo said.

Palm Beach County has a significant need for new industrial space. In the most recent quarter, tenant demand was so high that leasing volume slowed substantiallydue to a lack of available spaces and new projects, according to a JLL report.

Net absorption shot up to 135,862 square feet in the most recent quarter, compared to 52,247 square feet during the same period of last year. Yet, only 321,000 square feet of new industrial space is currently under construction in Palm Beach County, the report shows. The county had a first quarter vacancy rate of 4.5 percent, and asking rents for industrial tenants averaged $9.47 a square foot.

 

Source: The Real Deal

Easton Group Proposes Warehouse Near Port Of Palm Beach

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Easton Group has proposed a warehouse in Riviera Beach to aid in distribution of goods from nearby Port of Palm Beach.

Miami-based Easton Group owns the 8.9-acre site on the Dr. Martin Luther King Jr. Blvd. on west side of railroad tracks. It acquired the vacant property for $6.5 million in December 2021 through SFG ISF Riviera MLK LLC. The developer has a pending application with the city to combine three parcels into a single tract of land and to build a 34,500-square-foot warehouse/office facility.

The Riviera Beach Planning and Zoning Board approved the application 5-1 on April 28. The project will need City Council approval at a later date. The building would have 31,500 square feet of warehousing and 3,000 square feet of office, along with 60 trailer loading docks lining the building. There would be 49 trailer staging parking spaces on the site.

 

Source: SFBJ