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Commercial Real Estate: US: Difference between revisions
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== Vancancy Rate == | == Vancancy Rate == | ||
=== Multifamily === | === Multifamily<ref name=":0">https://cre.moodysanalytics.com/insights/cre-trends/q1-2023-preliminary-trend-announcement/</ref> === | ||
* Vacancy ticked up 13 basis-point (bps) to end Q1 at 4.71%. This was the biggest jump over the past two years, which pushed the current vacancy over the pre-pandemic level of 4.68%. | * Vacancy ticked up 13 basis-point (bps) to end Q1 at 4.71%. This was the biggest jump over the past two years, which pushed the current vacancy over the pre-pandemic level of 4.68%. | ||
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=== Office === | === Office<ref name=":0" /> === | ||
* Vacancy rose to 19.0%, up 20 bps from a quarter-ago due to oversupplied stock and exceeding the pandemic peak of 18.5%. Office vacancies rose for the 5th consecutive quarter, another step closer to its historic peak of 19.3% in 1991 | * Vacancy rose to 19.0%, up 20 bps from a quarter-ago due to oversupplied stock and exceeding the pandemic peak of 18.5%. Office vacancies rose for the 5th consecutive quarter, another step closer to its historic peak of 19.3% in 1991 | ||
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=== Retail === | === Retail<ref name=":0" /> === | ||
* Vacancy flatlined at 10.3% over the past four quarters. | * Vacancy flatlined at 10.3% over the past four quarters. | ||
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|1.70% | |1.70% | ||
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https://www.cushmanwakefield.com/en/united-states/insights/obsolescence-equals-opportunity | The U.S. will end the decade with 1.1 bsf of vacant office space, 740 msf of which qualifies as normal or natural vacancy and 330 msf of which qualifies as excess vacancy attributable to remote and hybrid strategies. The overall level of vacancy will therefore be 55% higher than was observed prior to the pandemic. Softness in the market will not be equally distributed. Currently, buildings with greater than 50% vacancy comprise 7.5% of total inventory. <ref name=":1">https://www.cushmanwakefield.com/en/united-states/insights/obsolescence-equals-opportunity</ref> | ||
Prior to the pandemic (Q4 2019), average office employee density measured at 190 sf per employee.4 The ratio declined by 7.9% over the last three years and is expected to tighten further as remote and hybrid work ecosystems evolve.<ref name=":1" /> | |||
Cushman & Wakefield estimates that one-third of office leases scheduled to expire between 2020 and through 2030 have occurred as of the end of 2022, implying two-thirds of a shift in space usage is yet to come.6 If so, office space per employee would decline by another 23.7% (i.e., the current observed downshift of 7.9% multiplied by three), ultimately settling in around 144 sf per employee. <ref name=":1" /> | |||
== Refinancing Risks == | == Refinancing Risks == | ||