FORT COLLINS, CO – Inland Real Estate Acquisitions announced that it negotiated and helped close the buy of Village Gardens Apartments, a 141-unit multifamily property located in Fort Collins, Colorado, approximately one hour north of Denver.

Matthew Tice, senior vice president of Inland Real Estate Acquisitions, Inc., facilitated the transaction, with help from David Neboyskey, assistant vice president and associate counsel of The Inland Real Estate Group Law Department, on behalf of an Inland affiliate.

Located at 1025 Oxford Lane, Village Gardens Apartments consists of 12 buildings with 39 one-bedroom, 66 two-bedroom and 36 three-bedroom units. Unit features include upgraded countertops, wood-style flooring, new cabinets and updated light fixtures. Community amenities include a fitness center, dog park, fire pit with gas grills, sand volleyball court, life-size chess set and an all-season indoor pool.

“Village Gardens Apartments marks the fourth multifamily property that Inland Real Estate Acquisitions, Inc. has helped buy in Fort Collins,” said Tice. “Our familiarity with this market and the property’s close proximity to Colorado State University, various retailers and major employers made this an attractive buy and a prime example of the multifamily acquisitions we continue to seek out.”

As of October 26, 2017, the property was 97 percent occupied.

To date, Inland Real Estate Acquisitions, Inc. has facilitated more than $44 billion of buys including single-tenant properties, medical office buildings, retail properties and a total of more than $4.7 billion in apartments.

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CHICAGO, IL – Dodge Data & Analytics released its 2018 Dodge Construction Outlook, a mainstay in construction industry forecasting and business plotting. The report predicts that total U.S. construction starts for 2018 will climb 3% to $765 billion.

“The U.S. construction industry has went into a mature stage of expansion,” stated Robert Murray, chief economist for Dodge Data & Analytics. “After rising 11% to 13% per year from 2012 through 2015, total construction starts advanced a more subdued 5% in 2016. An vital question entering 2017 was whether the construction industry had the potential for further expansion. Several project types, including multifamily housing and hotels, have pulled back from their 2016 levels, but the current year has seen continued growth by single family housing, office buildings, and warehouses. In addition, the institutional segment of nonresidential building has been quite strong, led especially by transportation terminal projects in combination with gains for schools and healthcare facilities. As for public works, the specifics of a $1 trillion infrastructure program by the Trump Administration have yet to materialize, so activity continues to hover around basically the plateau for construction starts reached a couple of years ago. Total construction starts in 2017 are estimated to climb 4% to $746 billion.”

“For 2018, there are several positive factors which suggest that the construction expansion has further room to proceed,” Murray continued. “The U.S. economy next year is anticipated to see moderate job growth. Long term interest rates may see some upward movement but not substantially. While market fundamentals for commercial real estate won’t be quite as strong as this year, funding support for construction will continue to come from state and local bond measures. Two areas of uncertainty relate to whether tax reform and a federal infrastructure program get passed, with their potential to lift investment. Overall, the year 2018 is likely to show some construction project types register gains while other project types settle back, with the end result being a 3% increase for total construction starts. By major sector, gains are predicted for residential building, up 4%; and nonresidential building, up 2%; while nonbuilding construction stabilizes after two years of decline.”

The pattern of construction starts by more specific segments is the following:

Single family housing will rise 9% in dollars, corresponding to a 7% increase in units to 850,000 (Dodge basis). Continued employment growth has eased some of the caution shown by potential homebuyers, while older Millennials in their 30s are helping to lift demand for single family housing. A modest boost will also come from rebuilding efforts in Texas and Florida after Hurricanes Harvey and Irma.

Multifamily housing will retreat 8% in dollars and 11% in units to 425,000 (Dodge basis). This project type appears to have peaked in 2016, helped by widespread growth across major metropolitan markets. That strength has begun to wane in 2017, given slight deterioration in market fundamentals (rent growth, occupancies) and a more cautious bank lending stance.

Commercial building will increase 2%, following a 3% gain in 2017, and continuing to decelerate after the sharp 21% hike back in 2016. Office construction should see further growth in 2018, helped by broad development efforts in downtown markets, and warehouse construction is supported by greater demand arising from e-commerce. But, store construction will remain weak, and hotel construction will continue to pull back from its 2016 peak.

Institutional building will advance 3%, maintaining its upward track after this year’s 14% jump. Educational facilities should see more substantial growth next year, lifted by the passage of recent school construction bond measures. The robust volume of transportation terminal projects in 2017 may not be repeated in 2018, but activity should stay at a high level.

Manufacturing plant construction will go 1% in dollar terms, after surging 27% this year due to the start of several massive petrochemical projects. Next year should still see moderate growth for manufacturing plants in square footage terms.

Public works construction will improve 3%, slightly more than the 1% growth in 2017. Highways and bridges should be helped as federal funding rises to the levels called for by the QUICK Act, while the environmental categories will partly reflect reconstruction efforts related to Hurricanes Harvey and Irma. Additional benefit may come from the infrastructure program proposed by the Trump Administration, should it achieve passage in some form.

Electric utilities and gas plants will drop 13%, falling for the third year in a row after the exceptional amount reported in 2015. Power plant construction starts will ease back as new generating capacity comes on line.

The 2018 Dodge Construction Outlook was presented at the 79th annual Outlook Executive Conference held by Dodge Data & Analytics at the Swissotel in Chicago IL. Copies of the report with additional details by building sector can be ordered at construction.com

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CHICAGO, IL – Commercial prices will plateau and may fall in large markets, but secondary markets will experience sustained demand and stable real estate prices, according to Lawrence Yun, National Association of Realtors chief economist.  

During a commercial real estate forecast session at the 2017 REALTORS Conference & Expo, Yun and JLL Chief Economist Ryan Severino both expressed confidence that the commercial sector should remain on an upward trajectory, but buyers and sellers could be at odds over price.  

“The commercial market should expect a standoff between buyers and sellers over price in the next year, which could lead to fewer transactions. Buyers cannot offer low cap rates because of rising interest rates, and sellers cite the strong economic climate as a reason for high prices. Furthermore, vacancy is falling, yet construction has been lagging because of worker shortages,” Yun said.

Yun went on to say that overall, the market is healthy; commercial property prices rose 90 percent in the last seven years, but recent headwinds are developing some ambiguity. “The economy is quite impressive and yucky domestic product has grown 3 percent in the last quarter, despite hurricanes and other economic factors,” he said. “The consumer confidence index is also growing, and the nation’s net worth and consumer spending are at historic levels.”

Yun expects GDP to come in around 2.2 percent for the year and to expand to 2.8 percent overall in 2018, as long as job growth remains solid and construction picks up in both residential and commercial sectors. National office vacancy rates are forecast to remain fixed over the coming year with rent rising at 2.5 percent per year. The vacancy rate for industrial and retail space are expected to also remain stable with rent rising slowly at 4 percent and 2 percent, respectively.

Even as new apartment completions bring more supply to markets, the multifamily sector will likely see a vacancy rate remain steady, with rent rising slowly at 3 percent per year. Supported by the ongoing stretch of outstanding job creation since 2010, commercial real estate and vacancy rates, in particular, are expected to be stable across the country. Warehouse vacancy will continue to decrease because of a strong appetite for industrial space, specifically ecommerce and trade.

Yun went on to say that high-tech company expansions, such as Amazon, will have a large effect on regions across the country. “Depending on where these secondary headquarters land, nearby property owners will experience robust growth and property prices, but renters will indirectly feel a pinch of much higher rent payments,” Yun said.

Severino joined Yun onstage and delved into the global economy and the performance of major property types. “Global economic growth is accelerating, and 2018 sees the world’s economic trains running strongly together. Interest rates are also going up but remain low by historic standards,” Severino said.  

He anticipates a strong performance from all sectors of commercial real estate, with supply starting to catch up with demand. “It is vital to note that commercial practitioners may be getting too comfortable with the large demand for construction and the fantastic performance of the industrial sector. Furthermore the suburban market is seeing more activity compared to downtown,” he said.

Yun also highlighted the current tax reform plot in front of Congress and the impact it may have on the commercial market. “The industry holds the 1031 like-kind exchange sacred and, currently, it is included in the tax code plot for commercial real estate. This is fantastic news for commercial practitioners and for the industry at large,” he said.

For more information on the commercial real estate market, visit realtor.org/commercial.

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