Top CRE Research & Insights
Matthews Real Estate Investment Services™ delivers cutting-edge research and insights and covers a multitude of property types and markets across the U.S. to provide investors with important updates. Browse the top 10 articles of Q4 2022 below for evolving market conditions and to help you make better and informed investment decisions.
Impact of Inflation on Consumer Spending
Inflation significantly affects what consumers choose to buy, where they decide to go, and what they choose to do, especially when there is talk of a potential recession. Consumer spending in the United States increased more than expected in September while underlying inflation pressures remained elevated, putting the Federal Reserve on track to raise interest rates. Americans may be concerned about inflation, but they continue to shop, which keeps the economy growing for another quarter. The sectors heavily impacted by rising inflation rates include food, travel, motor vehicles, and durable goods.
Industrial Sale Leasebacks | Benefits of Unlocking Equity in Your Building
It may be worth exploring the opportunities a sale leaseback can present to you and your business. In simple terms, a sale leaseback occurs when you sell a property you operate out of and sign a lease with the buyer who acquires the property. In H1 2022, there were over 397 industrial sale leaseback transactions, a 5% increase compared to sale time last year. In this article, Matthews™ breaks down the benefits that a sale leaseback can provide for industrial owner-operators around the country.
A 2023 Forecast for Industrial CRE
The United States industrial market is anticipated to see increasing supply growth as leasing activity continues to hold near record highs, up approximately 60 percent compared to levels seen before the pandemic. 2023 will see a large pipeline of new development, driving a moderate increase in vacancy, which will bring down rent growth slightly, to the delight of tenants. Investors can anticipate shorter construction timelines pushing new development. Industrial will continue to be a CRE sweetheart, although shifts in the market inevitably impact the sector.
Zero Cash Flow Deals: What Are They and Why They Can Work
A zero cash flow property oftentimes called a “zero,” is defined by having a few characteristics, including a highly leveraged asset, long-term financing, a fixed rate, and the guarantee of an investment-grade tenant. In this type of investment, all net operating income services the debt owed on the property, meaning the property owner receives zero cash flow. Zeros are most attractive for 1031 Exchange buyers that need to replace their investment but have little to no equity. This investment strategy can replace a large amount of debt in a tight timeline without the start-up costs.
Retail Real Estate During the Holiday Season
Retail remains steady despite the recession and inflation concerns. In fact, U.S. retail real estate vacancies are down, rents are up, and more stores are opening than closing. Last year, more stores opened than closed for the first time since 1995, and several analysts predict that this trend will continue into 2023. Brick-and-mortar store owners are posting some of their best numbers in years and are planning expansions as more Americans venture out to purchase retail items once again. Top retail sectors to invest in include electronics, home furnishings, apparel, automotive, big-box retailers that sell a little of everything, and grocery stores.
How the Los Angeles “Mansion Tax” Impacts Multifamily
The most high-profile of the city’s ballot measures, United to House L.A., also known as the “Mansion Tax” has passed. Its aim is to fund affordable housing programs for tenants at risk of homelessness and slap a tax on high-priced real estate sales (4% to 5.5% tax on property transfers over $5M-$10M). The measure took effect on January 1, 2023, and will not impact transactions until April 1, 2023, meaning investors contemplating a potential property sale have approximately a four-month window to avoid being subject to the new tax.
10 Trends You Should Know About the Retail Sector
The world of retail is constantly changing. External factors like the pandemic, rising inflation, and the threat of recession have all affected consumer buying habits. However, while times of inflation hold several challenges, inflation is also full of opportunities. From a digitally altered shopping experience to global supply chain disruptions and a pandemic that refuses to abate, merchants can bet on one thing: people will continue to shop.
Q&A | Making Sense of the Multifamily Market
As national pressures mount on the economy, the current state of the multifamily market is one of long-term appreciation and opportunistic opportunities. With inflation soaring and interest rates up, questions about vacancy and rental rates are being raised. In the following Q&A, Matthews Real Estate Investment Services™ featured agent, Taylor Avakian has all the updates on current trends and dynamics within the multifamily market today.
A Deeper Look at 1031 Exchanges
1031 Exchanges can be intimidating to those who are unfamiliar with the process. They are a popular tax deferral strategy for real estate investors involving the sale of one or more assets in exchange for one or more like-kind properties of equal or greater value. To qualify for a 1031 exchange, the properties exchanged must be of “like-kind”, referring to the nature of the property. This lets an investor defer both capital gains tax and depreciation recapture tax upon the sale of property and use the money that has not been taxed, to purchase a like-kind property.
Top Markets for Short Term Rentals
Short-term rentals (STR), also known as vacation rentals or rental housing, are generally furnished lodgings rented for brief periods. They are valued at $1.8 trillion and are one of the fastest-growing commercial real estate sectors. Because of the prices, furnishings, and space, these rentals may be more appealing than hotels. The market for short-term rentals has expanded to include all types of housing, from single-family homes to condominiums to apartments.