The exponential growth in online retail is having varied and at times dramatic effects on real estate and the tenants who occupy space. The most obvious is seen in the retail sector. Vacant stores, dark malls and famous retail brands disappearing are all results of this shift in consumer preferences. A less publicized but increasing trend is the growth in demand for warehouse and distribution space where the ‘behind the scenes’ activity occurs.
Annually the Counselors of Real Estate (CRE) reviews the real estate landscape at mid-year and solicits input from their members and leadership to identify the top ten issues affecting real estate for the upcoming year. For 2017-2018 this survey and analysis concludes that the number one issue affecting real estate for the upcoming year is Global Uncertainty and Political Polarization.
The continued strong demand for good quality investment real estate is causing some investors to step back and analyze where we are in a typical cycle. Although there are different opinions, it is clear that we have been in 5-6 year run of increasing prices, capitalization rate compression and strong demand. The demand remains strong for good quality investment real estate. To some, we are still in an undersupplied market for Class A properties.
Increasingly, there is a buzz in the air – not necessarily related to our recent political adventures in the presidential election. Rather the buzz may be coming from a drone near you. The number of drones in the air is increasing exponentially every year ranging from toy level drones available at Best Buy or even the local hardware store to sophisticated drones used for a variety of purposes and costing many thousands of dollars.
Always hopeful, New Englanders look to spring as a time to take stock and look forward after winter. Although spring seems to be struggling a bit, being optimistic is important. However, a dose of reality may be on the horizon in the realty markets.
As is the custom at this time of year we often reflect on what has passed and look forward to the New Year. Much has been said about the past year and rather than look in the rearview mirror, I prefer to look ahead.
Cybersecurity is all over the news today as a major concern with significant impacts to our economy. Attending a program at the recently concluded Counselors of Real Estate Conference in Charlotte, NC, the local and immediate impact of cyber threats came through clearly. As we are increasingly becoming aware, building management, maintenance, and control systems are increasingly online. Everything from HVAC systems, security access, environmental controls/energy management, garage access systems and wireless networks are potential entry points for hackers to attack.