United States Real Estate Report

Published 10 August 2015

  • 78 pages
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United States Real Estate Report

BMI View: The US commercial real estate market is growing due to a growing US economy. It further profits from an improving business environment, inflation rates and consumer confidence. Despite the dominance of local players, there is an increasing number of foreign investors who want to secure investment in a ''safe haven. This trend can be explained by the security the US real estate market offers as well as good revenue margins. Following robust growth in 2014, we expect 2015 and 2016 to continue in similar lines, with new properties entering the market stabilising costs and vacancy rates in all sub-sectors and cities.

The US economy is set to grow at a more rapid pace in 2015, supported by lower oil prices, a tightening labour market and improving sentiment, although rising external headwinds will see that growth remain relatively subdued. We forecast real GDP growth of 2.5% in 2015, up from 2.4% in 2014. Over the long term, global headwinds and a rebound in imports will cap real GDP growth below historical

The economy of New York City constitutes the largest regional economy of the United States and is greatly influenced by its financial industry. Los Angeles is a major trade hub and manufacturing centre. Also Chicago excels in trade and manufacturing. Philadelphia's economy is characterized by a decline of the manufacturing industry which is substituted by more knowledge-based sectors like healthcare and education. Trade accounts for a considerable industry share. Dallas' growing economy is based on its technology and business sector.

Office space will remain an appealing commercial real estate segment for investors, in our view, over

the next few years. We expect this segment of the commercial real estate market to grow, as the national job market and tertiary services in particular are growing. With regards to user demand, the greatest opportunities continue to lie in the new-build developments for premium and Grade A office space. Across all the cities...

BMI Industry View
7
SWOT
9
Political
10
Economic
11
Operational Risk
12
Industry Forecast
13
Office Real Estate Industry Forecast
13
Table: Office Rental Rates
15
Table: Office Yields (%)
17
Retail Real Estate Industry Forecast
18
Table: Retail rents
21
Table: Retail Yields (%)
23
Industrial Real Estate Industry Forecast
24
Table: Industrial rental rates
27
Table: Industrial yields (%)
28
Residential And Non-Residential Building - Outlook And Overview
30
Table: Residential and Non-Residential Building Industry Data (United States 2013-2018)
30
Table: Residential and Non-Residential Building Industry Data (United States 2019-2024)
30
Table: Major Projects - Social Infrastructure And Non-Residential Building
35
Macroeconomic Forecasts
57
Economic Activity
57
Industry Risk/Reward Ratings
62
Industry Risk Reward Ratings
62
Table: Developed Countries Risk Reward Index
62
Market Overview
64
Competitive Landscape
66
Property Developers
66
Property Managers
67
Demographic Forecast
69
Table: Population Headline Indicators (United States 1990-2025)
70
Table: Key Population Ratios (United States 1990-2025)
70
Table: Urban/Rural Population & Life Expectancy (United States 1990-2025)
71
Table: Population By Age Group (United States 1990-2025)
71
Table: Population By Age Group % (United States 1990-2025)
72
Methodology
74
Industry Forecast Methodology
74
Sources
75
Risk/Reward Index Methodology
76
Table: Real Estate Risk/Reward Index Indicators
77
Table: Weighting Of Indicators
78

The United States Real Estate Report features BMI Research's market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's United States Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in United States.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for United States to test other views - a key input for successful budgeting and strategic business planning in the American real estate market.
  • Target business opportunities and risks in United States through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our company profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Industry Forecasts Outlook

Historic data series (2010-2013) and forecasts to end-2019 for the domestic real estate industry and for the local and global finance industry.

Indicators Include:

  • Real Estate: Office, retail and industrial real estate yields for all major cities (%); short term forecasts on minimum and maximum real estate rental prices by sub-sector (USD per square metre and local currency per square metre).
  • Construction: Industry value (USDbn); contribution to GDP (%); employment (‘000); real growth (%).
  • economy: Economic growth (%); nominal GDP (USDbn); unemployment (%); interest rates (%); exchange rate (against USD).

BMI’s Real Estate Risk Reward Index

BMI’s Risk Reward Indices provide investors (real estate vendors, construction companies and financial investors) looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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