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Perspective on current capital markets from Cushman & Wakefield link

• The Federal Reserve cut rates by 25 bps on November 7th, marking a cumulative 75 bps reduction from the peak. This demonstrates a deliberate and balanced approach to supporting economic growth while maintaining inflation control, now at 2.1% y/y from a peak of 7%.

• Capital markets are slowly recovering, with improving debt conditions and declining redemption queues indicating renewed investor confidence. Fixed-rate debt costs have improved 125-150 bps since late 2023, despite some post-election bond market volatility.

• CRE fundamentals show strong resilience, with multifamily demand poised for its second-best year and retail vacancies near record lows. Industrial construction pipelines have thinned by 57% from their 2022 peak, keeping vacancy rates low even as supply pressures ease.

Limited construction driving retail, industrial performance link

• Retail vacancy rates stayed low at 4.5% nationally in Q3, supported by 2.7 million square feet of net absorption and limited construction. This stability has persisted for 10 consecutive quarters despite challenges in older mall formats.

• Industrial vacancies climbed to 6.6%, the highest since 2014, driven by 54 million square feet of new space added in Q3 against only 22 million square feet absorbed. E-commerce remains a key driver, but oversupply has outpaced demand.

• Construction of industrial spaces is expected to drop significantly, from 315 million square feet in 2024 to 210 million in 2025. This slowdown could help the market recover, especially in resilient cities like Chicago, Louisville, and Minneapolis.

22% of U.S. residents are more likely to move now that the election is over link

• 22% of Americans are more likely to move following the election, with over a third (36%) considering international relocation and 26% looking at other states. Political dynamics appear to influence mobility decisions across demographics.

• Young adults (18-34) are the most likely to move, with 34% expressing intent compared to 23% of those aged 35-54 and just 9% of those 55+. Renters and lower-income individuals (under $50,000) show the highest interest in relocation.

• Political affiliation shapes moving preferences: 28% of Democrats versus 16% of Republicans are more inclined to move post-election. Among Democrats, 59% favor international destinations, compared to just 8% of Republicans.

Shifting demand patterns drive non-central business district(CBD) hotel outperformance link

• The ADR premium for CBD hotels has dropped from 62% in 2008 to 42% in 2024, driven by ride-sharing services allowing guests to stay further from destinations. This shift provides cost savings for travelers and increased competition for CBD hotels.

• Resort and destination fees have surged, with the proportion of hotels charging these fees tripling since 2015. Budget-conscious travelers are favoring non-CBD hotels, which impose fewer such fees.

• Hotel loyalty programs now contribute 51% of total occupancy, up from 44% in 2018, partly due to remote workers. These programs attract guests with innovative features like day passes for business amenities.

Fast-growing apartment markets see rent cuts as supply surges link

• Sun Belt submarkets with rapid inventory growth, like Austin's Cedar Park and Jacksonville's St. Augustine, are experiencing notable rent declines. Cedar Park rents fell 11.2%, and St. Augustine rents dropped 6.4% year-over-year as inventory surged by over 58% since 2020.

• Washington, DC’s Navy Yard/Capitol South is an outlier among these fast-growing submarkets, with a modest rent increase of 2.3% annually. However, this growth is below DC’s overall average of 3.3% for the year.

• Phoenix’s Avondale/Goodyear/West Glendale submarket leads ongoing supply additions with nearly 12,000 units under construction. This will expand the area's inventory by 35% in 2025, intensifying competitive pressures.

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Trends in reverse mortgage stocks

A new trend for unused buildings.

10 states most wanting to refinance… and the 10 least

These Small Markets Scheduled to Get All-Time High Apartment Supply in 2025

10 issues facing commercial real estate link

List of Proptech Startups That Just Got Funded

How Much Americans Spend on Groceries in Each State

So many cool properties in IL

Link to the listing

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Cheers,

Vidit

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