As we move into the final quarter of 2018, it’s important for investors to take a look back at the trends that are shaping the current commercial real estate market.  Some years fare better than others, but all in all 2018 has most investors breathing a big sigh of relief.  The market has remained largely stable throughout the course of the year thus far and doesn’t show any signs of slowing down!  Read on to learn more about the factors playing in to this positive year!

Economic Growth

2018 has seen a vast improvement in the global economy which directly correlates to the health and stability of the commercial real estate market.  U.S. workers have experienced an overall raise in wages, encouraging them to spend their money more freely (as opposed to years past where it seemed all of us were penny pinching).  A look at the economic forecast proves that these favorable conditions don’t appear to be going anywhere in the foreseeable future.

Supply and Demand

online shopping and state of the commercial real estate market The demand for the vast majority of commercial real estate properties is another area that continues to look positive.  Even with the influx of online services and retail becoming readily available, brick and mortar is still going strong.  To get a deeper idea of the stability of each sector, let’s take a look at them individually.

  • Multifamily: Multifamily still remains a top contender in the commercial market.  With more and more Americans choosing to rent verse buy, this sector has grown leaps and bounds over the past decade.  Between the droves of millennials flooding the market and the onslaught of baby boomers looking to downsize, this area of commercial real estate won’t be slowing any time soon.
  • Office: The office space sector is also showing a lot of growth as the economy continues to heal and more and more business owners are choosing to branch out and expand their businesses.
  • Industrial: The first half of 2018 has given the industrial sector of the market its strongest start ever!  In fact, the numbers here have been record setting!
  • Medical Office Space: The medical office space sector is also booming as the demand for quality medical centers increases and new construction in this sector begins to slow.
  • Retail: While you may have heard some static about the state of the retail sector of the commercial market, the fact is that it’s had the least decline that it’s seen in the past few years.  This is proof that brick and mortar retail businesses are absolutely still in the game.
  • Hotel: As Americans cash in on the growth and stability of the economy, more and more are looking to travel, making the hotel sector of the commercial market a hot commodity for investors.

As you can see, the overall health of the commercial real estate market has been very positively impacted throughout the year.

Financing

All of this positive hype around the commercial real estate market has lenders excited to connect with the right investors.  In fact, 2018 has seen many new lenders flood the market and competition between lenders come to a head.  That being said, interest rates have been on the rise throughout the year.

Investor Profile

So who are all these lenders targeting?  The main investors in the commercial real estate market for the United States are largely local, with the U.S. topping the charts for sales.  Following closely behind us is Canada and then Europe.

The Influence of Technology

Along with the boost in the economy comes a whole bunch of advances in the technology of commercial real estate buildings.  While the outlook for the overall market is certainly looking favorable, it is more important now than ever to make sure that your commercial investment property is locked and loaded with the latest and greatest technological breakthroughs.  That means that investing in the current market might require a little additional overhead in order to get your property up to snuff to keep it a relevant competitor in your local market.  This is particularly true in and around major cities, as they prepare for greater availability of smart technology and mobility.

Looking for a Commercial Real Estate Investment Property in Baton Rouge or the Surrounding Areas?

As you can see, the commercial real estate market is on the rise and showing no sign of decline in the near future, making now the perfect time to find the right investment opportunity for you.  At SVN | Graham, Langlois, & Legendre, LLC, our dedicated team of Advisors is standing by, ready to make your investment dreams a reality.  Our various Advisors each come equipped with their own valuable skillset in a particular niche market, meaning that no matter what type of property you are looking for, we have the Advisor that can help you find it.  Take a look through our database of available properties today and reach out to a team member to begin your search!

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