The industrial sector rated highest among all property types in the East region of the US for its return vs. risk and value vs. price, while the retail sector fared the worst in return vs. risk and the apartment sector had the lowest rating for value vs. price. That’s according to a recent survey of regional correspondents conducted for the 3Q 2018 Situs RERC Real Estate Report.
Here’s a closer look at some of the major metro areas in the East:
NORTHERN NEW JERSEY
Thanks to the rising demand from e-commerce and healthy retail sales, the average asking rents for industrial assets in Northern New Jersey have been increasing. Developers are looking to revitalize older properties in New Jersey and capitalize on the high demand.
Net absorption of the office space in Northern New Jersey reached a two-year quarterly peak in 3Q 2018. The absorption was typically of newly renovated assets as demand for quality space grows.
Even though it lost out to the New York and Washington, D.C., areas for Amazon’s HQ2, Boston’s economy will still benefit from hiring by Amazon and other large employers in the area. Amazon Robotics already has its headquarters in the northern suburb of North Reading, and Boston was chosen in the summer of 2018 as the headquarters for a health care venture involving Amazon, Berkshire Hathaway and JPMorgan.
The CBD office sector continues to show strength, with robust absorption and rental growth. Development in the Seaport district and the talent pipeline coming from Cambridge provide support to the Boston CRE market.
Raleigh/Durham has experienced population growth driven by the metro’s boom in the education, medical and tech industries. The University of North Carolina at Chapel Hill and Duke University provide a pipeline of well-educated individuals ready to step into these jobs, which is boosting the local economy and providing support to the CRE market.
The demand for multifamily assets has evolved over the years. In recent years, the demand has been arising from a diverse set of demographics – particularly baby boomers seeking mobility and flexibility through downsizing.
Previously in Newswatch, we looked at the West (link), Midwest (link) and South (link) regions of the US.
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