Hurricane Michael smashed into beach resorts, shopping centers, apartments and office buildings with 155-mile-per-hour winds and rising seas, threatening more than $25 billion in commercial property along the Florida Panhandle.
The 500-mile stretch of coastline includes about 18,000 commercial buildings valued at $25.5 billion at risk of flooding by surging storm water up to six feet above ground level when the largest hurricane on record to hit the Panhandle reached land near Panama City, Florida, late Wednesday, according to a CoStar Group analysis of property data and recent sales information.
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The outcome of the midterm elections will impact the political environment and possibly the policy environment, but it is much less likely to significantly change the economic environment or impact the performance of commercial real estate (CRE).
- The consensus is that growth in the U.S. economy is likely to remain healthy regardless of the outcome of the elections, particularly in the near term—2018/2019. Given the correlation, demand for CRE space should also remain healthy.
- The real estate policy environment is unlikely to change dramatically regardless of the vote, but under certain scenarios, more of a gridlock situation could emerge. Historically, congressional productivity has declined after the midterm elections.
CRE values are more likely to be influenced by interest rates and the tremendous amount of capital targeting North American assets. Closed-end funds have $191 billion of dry powder as of October 2018—up nearly 32% since year-end 2016.
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Low unemployment rates are coupled with the growing need for tech savvy employees and forward-thinking perspectives on old products and services. New ideas are the precious raw materials – creating an intense focus on labor attraction efforts in the tech sector and technology jobs in traditional companies. Employers have responded by re-evaluating their location decisions and workplace experiences
Companies are moving their headquarters from suburban office parks to downtown locations. A key driver of this trend has been the availability of highly educated millennials, who tend to be more concentrated in the urban core.
In addition, because this group is forming families later, the urbanization trend could last a while, especially since the next generation, Generation Z, will also enter the workforce and increase the urban population before millennials eventually begin to move out. As millennials form families, it is likely that many of them will look to a more suburban lifestyle, and that may prompt some companies to move out to the suburbs. Or, if they stay in the core, they are likely to be more focused on transportation nodes that will create greater access for the suburban workforce