If you’re looking to invest in commercial real estate holdings, this year may be the time to take advantage of low growth rates.
A recent article on Bloomberg the stagnation of growth in the commercial sector according to analysts at Morgan Stanley:
“It was a surprising prediction for a market which has seen prices easily blow past their pre-financial crisis highs. Values for office buildings, hotels, shopping malls and the like have appreciated rapidly in recent years, thanks in part to insatiable investor demand for higher-yield commercial real estate assets.”
It’s also worth noting that while national growth rates are lower, this does not necessarily speak to large urban areas including the likes of Boston, LA, Dallas and Phoenix. A Forbes article notes:
“Higher prices and rents in prestige urban areas have attracted the most attention. Young, high-income professionals are fueling growing demand for multifamily units. Commercial property price indexes for apartments are at 294 today—up 180% from 2009’s low. Meanwhile, prices of office buildings in central business districts rose 115% to 245 in the same period. In some cities, it’s hard to keep up. New office space construction in Manhattan, for example, was projected to reach 4.3 million square feet in 2015—a 79% increase from 2014 and the highest level in 25 years.”
The growth of multi-use complexes throughout Scottsdale, and the ever-burgeoning expansion of downtown and central Phoenix continue to attract unique opportunities to invest. Additionally, while residential real estate prices have only recovered about 67% of their peak value by mid-2015 from ’09 – ’10 lows, the commercial sector has already grown 144% of their pinnacle worth before the market crash.