Turning to retail real estate fundamentals, new retail supply has recently been, and should continue to be, minimal in Canada. This is despite the surge in population seen in recent years, which has been beneficial to landlords. Therefore, retail real estate is effectively operating at frictional vacancy in Canada. In parallel, the expected rental rate growth is lower in Canada, a reflection of the slowing economy and Canadian households’ overall condition, which is impacting retailers. The retailer pool is shallower in Canada, constraining the ability to push rents. 

All things considered, market conditions are beneficial to retail REITs. In 3Q24, the sector’s covered names generated SPNOI ranging from 2% to 5%. The group should generate SPNOI growth rates between 2.5% and 3.0% on average in 4Q24 and in 2025. One significant sector risk is retail REITs’ focus on residential density within their existing portfolio. Mixed-use projects, specifically those with a large apartment/condo/townhouse component, are common. 

Current development activity is destroying value for every retail REIT. This is partly due to expected yields that were skinny at the onset and cap rates that have jumped during the development period. Retail market rents suggest new development will not pencil.

In addition, almost all retail REITs have identified additional density, mostly mixed-use with a significant residential component, to develop. However, if the cost of capital is development prohibitive for apartment REITs, then there’s no magic bullet to accretive development for the retail REITs either. Green Street estimates land values at a 10%-50% drop to published values for land that is under various stages of zoning, thereby further eroding net asset value. 

Most retail REITs are scaling down their mixed-use development activities in the near term and are addressing elevated leverage levels. This process should improve balance sheets, and ultimately profitability. 

The post Canadian Retail Sector – Keep it Simple appeared first on Green Street.

The increased investor interest in tertiary markets has not gone unnoticed by Green Street, and we are proud to launch detailed coverage on an additional 334 markets across four core property sectors: apartments, industrial, office, and strip centers. Green Street’s goal has always been to help commercial real estate investors make the best possible capital allocation decisions: In the public market through REIT stock selection; in the private market through sector and market selection. The expanded tertiary market coverage aims to provide clients with the high-quality data they are looking for to better evaluate investment prospects in these smaller cities. What may or may not come as a surprise to Green Street clients, the “biggest little city in the world” – Reno, Nevada – screens as attractively priced across all four core property sectors. While submarket selection within Reno is key, the city benefits from being a top-10 casino / gaming hub, drafts off its close proximity to the affluent Lake Tahoe area, and sports the first Tesla Gigafactory to boot.

Green Street’s new tertiary market coverage looks similar to our existing coverage of the Top 50 markets in the U.S., complete with 5-year forecasts for operating fundamentals, cap rate time series, market grades, and commercial property price indices – all delivered through an interactive user interface and enhanced Market Snapshot reports. As per Green Street standards, all data is standardized to consistent definitions for easy comparability. A new feature rolling out with our tertiary market expansion is GreenStreetAI™ – our first formal implementation of artificial intelligence and large language models into the Green Street product suite. Green Street is taking a cautious approach in its adoption of artificial intelligence, and GreenStreetAI™ is initially limited to the tertiary market commentaries and basic data collection. That said, we are nonetheless excited about its possibilities.

For more information about Green Street’s U.S. Tertiary Market Data expansion or to schedule a personalized walkthrough, click the link below.

Learn more about Green Street U.S. Tertiary Markets

1. There are 387 U.S. metropolitan statistical areas (MSAs) as defined by Census. Green Street categorizes these MSAs as “Top 50” and “Tertiary,” the former containing 50 markets and the latter 334 markets. Green Street has three less markets than Census, as three MSAs are included within the market boundaries of the Green Street Top 50.
2. As measured by Green Street’s sales transaction database.

Disclosure: The Green Street Forecasting tool is an estimation of future events based on market trends in historical data that have proved to provide actionable insights during past market cycles. Green Street makes no representations or warranties as to any future performance of such metrics under any market cycles.

The post Tertiary Markets Launch: The Biggest Little Cities appeared first on Green Street.

To do so you need to have the right comparison points to project what the expected value of a property is and what the bid-ask spread might look like. This informs your decisions whether to purchase, to hold, or to sell – and when to do so. However, with all property sectors still seeing declines in 1Q24 and appraised values declining as well, there simply isn’t much price transparency due to a lack of purchases and sales of comparable properties for many market participants to reference.

Why Use Price Transparency Tools

This is where CRE price transparency tools like Green Street’s Commercial Property Price Index (CPPI) become so integral to truly prepared real estate investors. Price transparency tools provide clarity as to how the market is currently valuing given properties. Green Street’s CPPI even goes one step further and specifically provides clarity as to what prices are today. This helps investors adjust their underwriting and valuations to more appropriately respond to current market trends. And the more informed your valuations, the more strategic you can be with your investment theses, etc.

There are several different metrics that are pulled into these projections and calculations. While we won’t dive into all of them here, you can get a glance of a few of the metrics that experts are keeping their eye on by accessing the definitions of all the below by logging into our Green Street Learning Center with client access.

CRE Metrics Used In Price Projections for Property Valuations:

1. Cap Rate
2. Operating Expenses Ratio
3. Gross Rent Multiplier
4. Occupancy Rate & Vacancy Rate
5. Net Operating Income (NOI)
6. Capital Expenditures (Cap Ex)

CRE price transparency tools can leverage customized formulas and live data pulled from a wide range of sources to give users a wider view of property pricing across the broader market on which they can rely. Price transparency tools like the list below are just a few you can leverage that are most widely trusted across the CRE industry.

Different Price Transparency Tools

1. Commercial Property Price Index (CPPI)®
   Green Street’s Commercial Property Price Index is a long-held time series that provides a snapshot of what value current CRE transactions are taking place. When based on the right data these CPPIs provide a vital context to the overall CRE market. The best CPPIs are distinguished by their timeliness, focus on high-value properties, and ability to capture changes in the aggregate value of any given sector.
2. Sales Comparisons (Comps)
   As the name implies, Sales Comparisons – or Sales Comps – allow real estate investors, brokers, and other market participants, to base their valuations on similar properties based on location, type, age, quality, and other metrics. Green Street Sales Comps even leverage a proprietary SmartComps algorithm to offer more accurate, comprehensive property data that is verified and enriched with market/sector analytics.
3. Automated Valuation Models (AVM)
   Automated Valuation Models create a custom model based on accepted and already recognized valuation approaches such as NOI Capitalization, Value Extrapolation, and Sales Comps to create a custom blended value of any given property. Green Street’s AVM is considered one of the most trusted and transparent AVM’s available today. AVM accuracy is substantiated by the back-testing results of the methodology white paper. For more details please request Green Street’s AVM white paper. This is not part of the UK regulated business.
4. Market Repots and Analytics
   Leveraging Market Reports from trusted sources allows you to rely on multiple data inputs while also getting experts’ views on specific sectors that you can then plug into your own models by using tool integrations like Snowflake or Green Street’s Excel Add-In
5. Public Market REIT Pricing Insights
   You can even use insights from the public market to leverage in private investments. Extrapolating on what specific REITs are currently valued at and using these valuations to gain perspective on what you can value private market properties can also give you a guide rail for how to underwrite your investments.

Takeaways

Regardless of the methodology you embrace, the likelihood a price transparency tool like Green Street’s CPPI or AVM will save you time and effort is highly likely. By leveraging the unbiased and market-tested models of CRE experts, you can stand on the shoulders of giants instead of trying to climb your way to the top from square one.  So, get ahead of the market by leveraging the best price transparency tools you can and don’t let the lack of data in today’s patterns stop you from acting on the patterns of tomorrow.

Click here to request a sample report and learn more about what insights Green Street has to offer. 

The post Seeing Through The Price Transparency Fog appeared first on Green Street.

In this post, we’ll be covering some of Green Street’s most interesting news stories and decipherable trends in Canada’s commercial real estate space focused on two different sectors – Industrial and Multi-family. And as the title implies, there is a certain “yin and yang,” for these two very differently performing sectors.  

Industrial Availability Yin 

Availability is on the rise in the Canada Industrial sector and many others. For the Industrial sector, specifically, availability has recently climbed over 5% as Green Street has covered in recent stories. But as supply begins to catch up with a previously sky-rocketed demand, there are now implications of the vast discrepancy beginning to close out in the sector (across multiple markets).  

Large portfolios have been purchased recently such as Epic, Woodbourne purchasing their new Montreal industrial portfolio in order to take advantage of this newly opened up availability. This could very well be a sign of new opportunities to come. It’s an interesting opportunity to see what the implications of rent rates could be for the Canada CRE market in general as the supply/demand window begins to close. Seeing that other large-form investors are making moves in the great white north, it’s worth participants from the public or private market at least paying attention to what’s happening in Canadian markets if it fits into your investment strategy.  

Multi-Family Availability Yang  

Multi-Family supply has been stifled as of late in multiple Canadian markets. Due to a lack of affordable housing and an equal lack in legislation dedicating funds to support new builds, the ability to acquire funding has been very hampered. This legislative gap has left many incomplete builds over the past 2 years, and many remain unfinished to this day given the unfavorable financing conditions. Because of this, demand is steadily outpacing supply.  

On top of this, as spoken to at the Western Canada Apartment Investment Conference, there has been an influx of inbound migration into Canada leading to an even further growing demand. Within this context there has been a lack of pre-construction purchases because incoming residents tend to rent before buying. In fact, sales have sunk nearly 45% in Q1 alone for the Canada Multi-Family sector, which could give landlords an opportunity to consider raising rents given spiking demand and low availability. With availability on the rise and the opportunities for divergent investments popping up more and more, large portfolios are being purchased in Canada by multiple firms and real estate investment trusts (REITs).  

Now that demand is likely to continue to climb with no immediate solution for supply, this means an even wider window of opportunity for rental rates to rise.  

Canada Articles 

You can read more of the stories themselves in these recently published Green Street News articles to get a bigger bite of the juicy details dripping from the Canada commercial real estate market:

• Vancouver industrial availability continues to rise: CBRE 
• GTA multifamily sales volume sinks 44.1% in Q1: Colliers 
• Key takeaways from the Western Canada Apartment Investment Conference 
• Epic, Woodbourne purchase Montreal industrial portfolio
• National industrial availability rate climbs to 5.1%: Altus 

Takeaways 

All these stories and more are available via our Green Street News offering which now provides multiple vantage points on the Canada commercial real estate market. Knowing which major actions are taking place in the market and who the key players are signals flags waving that can help give you a contextual and competitive advantage over the market. And when combined with Green Street research/data and our integrated platform of intelligence, the insights only become that much more powerful. 

Learn about Green Street’s Canada News and Research Offering to get access to breaking stories and unbiased data you can trust! 

The post Canada CRE News: The Yin-Yang of Industrial and Multi-Family Sectors appeared first on Green Street.

If you want to learn more about this new offering you can keep reading or watch the video below to see our Head of Global Data Centers, David Guarino, speak about the product himself.

Projections call for a 10% per annum expansion in industry-wide inventory over the next five years. Responding to this promising future, we are offering new data to make more insightful decisions in your investments.

Green Street’s new Global Data Centers Outlook provides expanded coverage and market-level insights for the sector. Examples of some of the report insights include:

1. Overview and Sector 101 for Data Centers
2. Key Takeaways for Trending Insights
3. Nominal Cap Rate Time Series 
4. Commercial Property Price Indices (CPPI)
5. Current Market IRRs and Build Ups
6. The Primary Supply Landscape for the Data Center Sector

Leveraging these differentiated insights, Green Street will help bring more color to the Data Center opportunity in the years ahead.

A few factors to consider on the surface: First, occupancy is already sitting at record high levels across the globe. This means that the need for new construction is necessary. Secondly, it’s important to note that data centers grow in a somewhat “network effect” model, in which the more infrastructure is built, the more fibers/network is built, the more data can be housed, and so the more data centers are needed. And so, the circle continues.

One can assume the promise this cycle can project, but for more insights you can request the report to dive into which markets are expected to show the strongest M-RevPAF growth (a Green Street proprietary metric combining rent and occupancy) in accordance with these projections. The gold rush of Data Centers does indeed seem to be built on a continuous circle of alchemy.

This is barely scratching the surface on the analysis from Green Street’s inaugural outlook report for the Data Center sector. With more research to come, it’s a matter of who will use this data to get ahead and stay ahead. With a gold rush already underway, and this seemingly self-rotating demand-supply cycle at its peak, who will strike first and who will find the golden vein? Green Street has the golden eye for quality data you don’t want to miss.

With a new booming industry considered “the real estate that supports the digital age,” the Data Center sector is certainly one to examine closely for certain investment strategies. As is the case with any investment decision, the more you are empowered with data the sturdier your actional insights will stand. And Green Street is waiting to maximize and optimize your data access, timely insights, and impactful commercial real estate news.

The post Diving Into The Golden Age of Data Centers With New Green Street Outlook appeared first on Green Street.

If you want to learn more about this new offering you can keep reading or watch the video below to see our Head of U.S. Lodging, Chris Darling, speak about the product himself. 

Having emerged from a period of unprecedented distress catalyzed by the Covid-19 pandemic, U.S. lodging fundamentals are on firm footing with several tailwinds that suggest upside may lie ahead. Green Street expects that the industry’s next leg of growth will be driven by improving group and international inbound travel, supplemented by a favorable supply backdrop. From a valuation standpoint, hotel asset values have held up far better in a higher interest rate backdrop than most other commercial real estate property sectors. While other sectors have experienced a ~15-30% decline in asset values since recent peak pricing in early ’22, lodging asset values have only fallen by ~5% (see our Commercial Property Pricing Index).

Green Street’s new U.S. Lodging Outlook will provide insights on the above and far more. Each report will provide:

1. Overviews and Sector 101s for Lodging
2. Key Takeaways for Trending Insights
3. Nominal Cap Rate Time Series
4. Commercial Property Price Indices (CPPIs)
5. Current Market IRRs and Build Ups
6. The Primary Supply Landscape for the Lodging Sector
7. Promising and Worrisome Ares of Investment
8. The Green Street Methodology for Lodging

Adopting this Green Street data into your business and investment strategy will help empower your decisions by leveraging insight, not just information, to act on cutting-edge trends impacting the lodging space. Due to its tight correlation with macroeconomic swings, the U.S. Lodging sector is often “first to react” to changing investment and/or operating conditions, which often provides valuable insight as it relates to other commercial property sectors. In an economy where superior data and due diligence lead to the best possible business outcomes, finding the right data to lean on can make all the difference.

Looking to the remainder of 2024, we envision an uneven growth trajectory as certain markets are still emerging from an elongated post-Covid recovery, while others are experiencing a reversion to normalized demand levels. While the industry, in aggregate, is on an upward path, identifying the best-positioned markets can help drive optimal investment outcomes. While there’s plenty to be optimistic about concerning the trajectory of the lodging industry, it’s important to take a sober

approach towards factors negatively impacting the sector such rising operating costs and an uncertain backdrop for consumer spending.

Make sure you aren’t just keeping up but acting on cutting edge data and insights. Green Street is waiting to transform your CRE data for better decision-making with just a click of a button – what are you waiting for?

The post Hotels Bouncing Back From Tough Times With U.S. Lodging Outlook appeared first on Green Street.

Some market participants are beginning to forecast long-awaited changes in CRE office vacancy rates. But it seems as though certain secondary factors are not being considered with these optimistic projections. New Green Street data shows that without considering additional supply and modern corporate policy towards in-office work, these projections seem to be out of touch with the wider scope of the office occupancy dilemma.  

New Green Street data gives the complete picture in our recent report “The Black Hole of Office Occupancy” as we dive into the deeper interconnected issues changing the tone of these overly optimistic projections.  

Now, even based on insights from March of ’23, hope for optimistic forecasts regarding CRE office vacancy rates is understandable given the long and cascading fall of office demand since the pandemic first began in ’19. According to Wall Street Journal, the WFH (work from home)  hybrid culture, coupled with the increasing focus on cost-conscious corporate budgeting, has created a massive dive in square footage with spikes in availability and vacancy – a bad trio for any office occupancy calculation.  

Some market experts believe that these numbers represent a hard bottom to the office occupancy problem that will likely be bouncing back strong with a what Investopedia has called V-Shaped recovery. But this is quite likely an over-optimistic interpretation of the situation. There are two theories to how the market will likely recover – and the optimistic one is far less likely when considering all the factors.  

What factors aren’t being considered in the optimistic “V-shaped” recovery projections are the rates of both new office supply and the in-office job growth. Ignoring these two numbers could give you the expectation that the rapid recovery forecast is reliable. However, the theory fails to consider the dark reality of how deep in the (black) hole CRE office vacancy is currently. 

“The last four years of disruption in the office market have been the worst on record… The cumulative amount of office space vacated since ’19 surpasses the amount seen during the dot-com bubble and dwarfs that of the Global Financial Crisis.”  

– Dylan Burzinski, Green Street’s lead office analyst 

Not only that, but the theory also fails to account for compounding factors such as an absorption rate of supply equal to that of 2019 pre-pandemic levels. Given the refocusing of work what the Harvard Business Review defines as the  WFH and hybrid models, such an absorption rate is highly unlikely. Additionally, while the in-office growth rate continues to decline, new office supply has steadily moved in the opposite direction.  

It’s safe to say that instead of the dials shifting in favor of a V-shaped, 5-year recovery (which is already an aggressive assumption given it took the market 11 years to recover from the Global Financial Crisis alone) we could very well be looking at a recovery rate at nearly twice that. 

The deeper data analysis on the situation can be found by requesting the report and further Green Street data in the form below. Be sure not to miss out on the reality of the Black Hole Of Office future and what you can – and should be doing – to adjust your underwriting for more profitably pessimistic purchases.  

The post Deceptive Optimism In CRE Office Vacancy Rates appeared first on Green Street.

“It’s not every day one of the top names in commercial real estate brokerage starts his goodbye tour. But as Real Estate Alert exclusively reports, CBRE’s Chris Ludeman is retiring, effective May 1. Even though the 40-year veteran – the firm’s president of global capital markets – will stay on as a senior advisor through yearend, it’s a changing of the guard at CBRE.”

Real Estate Alert breaking news report reviewing Luderman’s step down with direct statements from CBRE.

Real Estate Alert is widely recognized as the market’s early warning system for buyers and sellers of major U.S. CRE properties. The newsletter has covered the commercial real estate sector through multiple market booms and crises for more than thirty years. Real Estate Alert’s veteran reporting team closely monitors transaction activity and market trends, enabling us to offer timely insights and actionable intelligence on investment opportunities across asset classes. Newsletter Readers are able to leverage top players’ investment tactics, spot imminent risks and opportunities, and garner a recruitment edge.

Gain first-hand information on behind-the-scenes dealings, securing the competitive advantage you need to detect opportunities.

Real Estate Alert‘s weekly publication breaks the most meaningful stories in the commercial real estate space. 

The post CBRE’s Capital-Markets Chief To Step Down appeared first on Green Street.

The latest report by the Local Data Company (LDC) and Green Street, covering key developments across the entire Great Britain retail and leisure market over 2023, shows a spike in numbers of both closures and openings, representing significant churn.

Rises in interest rates and operational costs compounded the challenges for GB retailers, leading to a year-on-year increase in closures of 14% between 2022 and 2023. However, closures were somewhat tempered by a 5% rise in openings during the same period, indicating a much more resilient and adaptable market than has been seen in previous years. Innovative changes of use and retail-to-residential conversions have become increasingly attractive, offering an economically viable option to address vacancies, align locations with current demand and revitalise town centres.

Retail parks were a particular area of strength, continuing the positive trajectory they have seen in recent years. With a net increase in units of 0.4% over 2023, they were the only location type to see a positive overall change. Demand remained high for retail park units, driving a 1.4% year-on-year decrease in vacancy rate. Further decreases are expected as retailers continue to expand their out-of-town offer, with investors in this space projected to see some rental growth.

While competition from out-of-town retail drove a 1.3% decrease in units for shopping centres, vacancy did improve by 0.5%, reflecting continued efforts to attract occupiers following the pandemic as well as convert long term vacant space into other uses. Analysis by Green Street reveals that strong, experience-led tenant mix is the key to thriving shopping centres; accordingly, for many retailers in this sector, the focus has been on creating immersive in-store experiences and prioritising highly visible prime locations.

Despite the economic headwinds seen over 2023, the latest data indicates a notable level of resilience across GB retail and leisure. While inflation and interest rates ease, making space for growth, uncertainty is still present in the form of anticipated economic and political change. Green Street and LDC anticipate that flexibility and careful strategy will enable agile retailers and developers to navigate any upcoming challenges and identify opportunities.

The full report includes further detail on:

• Multiple vs independent performance
• Growing and declining retail and leisure categories
• Central London’s office hotspots
• Long-term vacancy rates
• Reoccupation of ex-Arcadia sites and department stores
• The potential for repurposing and repositioning retail assets, including via retail-to-residential conversion

A Trusted Voice in the Industry

The Local Data Company provides market participants with exclusive data and insights to support the following core client groups:

• Retail Occupiers- portfolio optimisation, expansion strategy, competitor tracking, market and sector tracking, and due diligence for M&A
• The Property Sector- tenant strategy, due diligence, asset acquisition, radius analysis of health, research on reoccupation activity, and evidence for business rates reform
• The Public Sector- strategic town planning, government funding applications, investment impact, and economic development projects.

LDC’s Quarterly GB Vacancy Monitor featured in recent React News article: Retail Vacancies Flatline As High Street Struggles Temper Recovery

PwC recently launched its latest figures for Store Openings and Closures in 2023 across Great Britain using research undertaken by Local Data Company.

The LDC and Green Street Partnership

The Local Data Company is now joined with Green Street to provide in-depth market analysis across the U.K. retail sector. With LDC’s granular, location specific analysis and Green Street’s forward looking thought leadership, the union will continue to provide market participants with timely and expanded insights.

Recent reports that incorporate both Green Street and LDC data:

• Central London Retail Insights: A Forensic Investigation

20 November 2023

Green Street takes a closer look at the London Retail sector using data from Local Data Company and sheds light on investor demand and real estate values. Whilst the holistic takeaway for London’s high-street retail is negative, granular analysis of two distinct portfolios suggests the negative read across is less severe than at first blush.

• U.K. Retail Insights: Mind the Vacancy Gap

4 February 2024

Spot vacancy is an important determinant of future cashflow resilience. Most European PropCos only report EPRA vacancy rates – effectively a ‘financial’ gauge of vacancy. LDC records physical vacancy as well as tenant categories. Granular analysis of this data provides insight into how the EPRA vacancy rate can be widely different to physical vacancy rates and highly misleading in times of cyclical stress in the industry.

• Office Insights – Central London: Holding Tight

20 December 2023

Green Street uses LDC’s rent and vacancy data to analyze both the investment and occupational markets. This provides insight into London’s total return outlook with prime submarket snapshots.

• Retail Insights: Grocery Stores: An Attractive Opportunity

23 November 2023

U.K. grocery has three categories: supermarkets (~55% of the stock), discounters (~25%) and convenience (~20%). Each grocery segment differs in terms of (i) location, (ii) size, (iii) sales productivity and (iv) profitability. Green Street analyzes private market portfolio quality based on LDC’s Supermarket Index.

This year, Green Street’s unique data assets and LDC’s rich retail intelligence will be integrated yet more closely, resulting in an enriched joint offering that provides unmatched value and depth of insight. John Guilfoy, Chief Product Officer at Green Street, outlines what clients can expect in 2024.

“We’re excited to relaunch the online platform, with more predictive analytics— making the data even more applicable and supportive to a wider range of use cases. These enhancements will empower clients to gain maximum value from our products and the unique thought leadership and differentiated insights we bring to this industry.”

As with all our product releases, these LDC enhancements have been shaped with client feedback at the forefront, ensuring that we meet the diverse needs of our users. Our development process takes the wide range of use cases for our data into careful consideration to deliver high value for all.

“We interviewed a host of clients and have worked diligently to focus enhancements around the most key parts of the products, bringing the best of LDC and Green Street together to deliver unparalleled analytics on the current and future UK retail market.”

The plans for our new platform include enhanced health indices, forecasting, competitor analysis, retailer health scores, portfolio analysis, and filtering, resulting in a suite of comprehensive intelligence tailor-made for investors and retailers.

Check out LDC’s full offerings and more insights: https://www.localdatacompany.com/

Green Street UK is authorized and regulated by the Financial Conduct Authority (FRN 482269). Our global organization maintains information barriers to ensure the independence of and distinction between our non-regulated and regulated businesses.  Local Data Company is not a regulated Green Street business unit.

The post Deep Dive into Local Data Company: 2023 UK Retail and Leisure Trends Analysis appeared first on Green Street.

The two analysts suggested stabilization moving forward for asset values. However, they mentioned there will likely be a couple more quarters of downward revisions to appraisal-based indices like the Nareit MPI. Traditional sector values – Apartments, Industrial, Office and Strip Centers – are down about 21% in aggregate pricing, which the two prefaced as a sign for what’s to come.  

According to Green Street, commercial real estate is roughly fairly valued today. Ryan walked through the methodology behind this conclusion by expanding on expected returns relative to their investment alternatives. He also analyzed expected returns to provide insight on Green Street’s proprietary sector allocation changes specifically for the traditional sectors. 

Rob provided valuable insights on each sector and outlined which markets have fared better or worse than anticipated. In the apartment sector, Chicago, Orange County, and Pittsburgh are each leaders in the top 50 markets due to the strength in fundamentals during 2023. For the office sector, Palm Beach and Miami are poised for near-term growth and high risk-adjusted returns. With lowering cap rates and positive long-term growth, Miami and Los Angeles are expected to thrive amongst the top 50 industrial markets. Salt Lake City strip centers have experienced declining vacancy rates at a much faster rate than most and will continue to benefit from more declines over the next few years. 

The two analysts also dove into a market allocation analysis of non-traditional sectors. With different markets outperforming across the board, there was an almost an equal number of upgrades and downgrades for Self-Storage, Senior Housing, and Single-Family Rental sectors  in 2023. 

Watch the full webinar 2024 Identifying CRE Opportunities: A Market-Level Analysis to get more proprietary analytics for specific markets in each sector. 

To keep up with Green Street’s differentiated perspective and receive notifications for future posts, opt-in for insights.

Hungry for more Green Street webinar insights? Click here to view our on-demand replay library.

Want to learn how you can incorporate Green Street’s insightful analyst intelligence like this and sector specific research in your investment strategy? Speak with a member of our team today.

The post Market Opportunities Amidst Revised Outlooks appeared first on Green Street.