Fall 2014 Austin Commercial Real Estate Market Trends

dr dotzourDr. Mark Dotzour, Chief Economist at Texas A&M University in College Station, Texas shares the following observations about Commercial Real Estate Market Trends from his recent experience in participating at multiple national conventions.  Most if not all of these trends can be found in the local Austin Texas Commercial Real Estate Market.

  1. Foreign investment is still in hot pursuit of  U.S. real estate.
  2. There is intense demand from foreign investors to use EB-5 funds to purchase real estate.
  3. Some lobbyists are concerned that the 1031 Exchange may be under fire in the next Congress.
  4. Two recent sales in the Beverly Hills and San Francisco multifamily markets were at below a 3 percent capitalization rate.
  5. There is intense institutional competition for quality office and multifamily properties in dense urban areas of the country’s biggest metros.
  6. Interest remains low for suburban office and flex industrial.
  7. Construction is up but absorption still exceeds completions in most places.
  8. Amazon’s new business model is creating a demand for warehouse space in many parts of the country.
  9. Demand for manufacturing space is down while companies continue to automate their processes.
  10. Commercial mortgage money is getting cheaper as lenders become more aggressive in an effort to facilitate deal-making.

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