Key Points: Multifamily cap rates have stabilized at around 5.7 percent after peaking in early 2024. First American’s Multifamily Potential Cap Rate Model predicts a slight decline in multifamily cap rates by year’s end, driven by rising sales activity and renter household formation. While certain markets are oversupplied, the national scarcity of ...

Key Points: Despite a projected increase in retail store closures in 2025, the impact on retail rents is expected to be minimal due to a shortage of retail space and high demand. Retail landlords may benefit from vacancies, potentially replacing less financially stable tenants with stronger ones who can pay higher rents. Most cities with ...

Key Points: Recent growth in real retail sales has been driven primarily by durable goods, though much of that spending has already slowed, indicating the consumer spending spree may be the result of consumers pulling purchases forward due to concerns about price trends. Additionally, much of this spending has been financed by rising consumer ...

Key Points: Commercial property insurance premiums have significantly increased over the past five years, driven by factors such as increased weather-related damages, rising replacement costs, and reinsurance availability. The increase in insurance premiums varies by location, with properties in disaster-prone areas experiencing the highest ...

Commercial real estate (CRE) is inherently cyclical, experiencing phases of expansion and contraction. For instance, the COVID-19 pandemic prompted a shift from urban centers as people sought more space, driving a surge in housing demand. Coupled with exceptionally low post-pandemic construction financing costs, this led to a rapid increase in ...

Key Points: Technological advancements like DeepSeek may paradoxically increase overall data center demand despite improved efficiency. Constraints on data center supply include significant requirements for electricity and water, as well as specialized expertise for construction and operation. The strong, long-term demand drivers for data centers ...

Key Points: Approximately 1.1-1.6 percent of Los Angeles' housing stock may have already been demolished by the wildfires The wildfires have rapidly reduced the housing supply, destroying an estimated 17,000 to 24,000 housing units Rebuilding in Los Angeles will be challenging due to the city's difficult building environment and zoning ...

Key Points: Multifamily cap rates appear poised to decline for the first time in nearly two years. Using First American’s Multifamily Potential Cap Rate Model, we forecast that multifamily cap rates are likely to gradually decline throughout 2025. The return of declining cap rates would be a sign that buyers are becoming more comfortable with ...

Key Points: The recovery will not just be an interest rate story, but also a price story. As property prices stem declines and stabilize, transaction activity will gradually follow. In the refinance markets, this rebound appears to already be occurring. Distress in debt markets will take longer to work out and will likely last beyond 2025. The ...

Key Points: Retail spending is the life blood of retail commercial real estate and it is slowing in real, inflation-adjusted terms. When compared to pre-pandemic levels, retail rents have not fallen in any of the largest cities and have increased the most in locations with larger population growth. Despite some consumer headwinds, there is very ...