America’s Top Housing Market

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Net lease cap rates rise as supply surges link

• Supply has increased across all asset classes since August, with over a third of properties on the market being newly listed. Casual dining led the surge with a 21% rise in supply, followed by banking at 20% and convenience stores at 17%.

• Retail cap rates climbed across all sectors, with grocery and dollar stores seeing the biggest jumps at 19 and 23 basis points, respectively. Convenience store cap rates remained steady, while QSR cap rates edged up by just one basis point.

• The industrial sector saw a 28% increase in available properties, with distribution leading at 27%. FedEx had 15 properties on the market with an average cap rate of 6.55%, while Amazon listed four properties at an average price of $15 million.

Class B apartments lead occupancy recovery, surpassing Class C for first time link

• Apartment occupancy rebounded to 94.8% by the end of 2024, aligning with historical norms after a record year of new supply. Demand caught up to supply, stabilizing the market.

• Class B apartments, which make up half of the nation's rental stock, overtook Class C as the most occupied category, ending 2024 at 95% occupancy. Class A trailed at 94.5%, while Class C landed at 94.8%.

• All three asset classes showed improvement, though still below pre-pandemic five-year averages. Class B saw the largest gain, rising 80 basis points in 2024, while Class A and C each grew by 50 basis points.

Office investment increases for first time since 2021: WSJ link

• Office building sales hit $63.6 billion in 2024, up 20% from 2023, marking the first increase since 2021. Sales remain far below pre-pandemic levels of $143 billion.

• Opportunistic real estate funds had $196.8 billion in available capital at the end of 2024, fueling expectations for increased deal activity in 2025. Foreign investors, including Norway’s sovereign wealth fund, are already moving in.

• Some office markets are seeing shortages as new development has slowed, pushing companies to buy existing properties. Return-to-office mandates are adding pressure, with cities like Atlanta, Austin, and Charlotte seeing recent major office purchases.

Coworking sees steady growth as hybrid work reshapes office trends link

• The number of coworking spaces in the U.S. grew 2% in Q4 2024, reaching 7,695 locations. Los Angeles, Dallas-Fort Worth, and Washington, D.C., remain the top three markets by inventory.

• Salt Lake City led growth with an 8% increase, adding six new spaces to reach 81 total. Austin also expanded by 5%, bringing its total to 92 coworking spaces.

• The national median price for open workspaces dipped slightly to $149, while Manhattan saw a steep drop from $299 to $240. Dedicated desk prices rose the most in Denver and Nashville, increasing by $19 to $319 and $324, respectively.

The Rise of the 'Boy Apartment':  link

• The "boy apartment" trend is replacing the outdated bachelor pad with a more curated, stylish space. Social media platforms like TikTok and Instagram have fueled the shift by making interior design inspiration more accessible.

• Popular elements of boy apartments include neutral color palettes, mid-century modern furniture, and high-end home accessories. Instead of gaming consoles and clutter, these spaces now feature skincare products, gallery walls, and sleek lighting fixtures.

• Many of these apartments incorporate affordable yet stylish furniture from IKEA and big-box retailers. The trend is driven by a growing emphasis on personal style, organization, and creating a home that reflects sophistication rather than transience.

America’s Top Housing Market Is an Affordable Midwest City Where Buyers Can Save $163,000 on a Home

• Canton, OH, ranked No. 1 in the latest Wall Street Journal/Realtor.com Housing Market Ranking, with a median home list price of $239,900 in December. This is significantly below the national median of $402,502, making it a prime location for affordability.

• Homes in Canton are selling fast, with a median of 43 days on the market compared to the national median of 70 days. Demand remains strong due to its lower cost of living and stable local economy.

• The top 20 markets in the ranking are dominated by the Midwest and Northeast, with Ohio leading the list with five metros. Trenton, NJ, saw the biggest jump, climbing 16 spots due to high interest from New York City and Philadelphia buyers.

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Vidit

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