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 ...

Key Points: Assumable debt accompanies a property at sale and can be one way to complete a transaction when other forms of credit are scarce or costly. Assumable is typically more attractive when outstanding interest rates on mortgages are lower than prevailing rates for new loans. Though assumable debt use is currently lower than in the years ...

Key Points: CRE refinance volume has declined from a post-pandemic peak but, despite higher interest rates, is stabilizing. Dollar volume of hotel refinancings is a bright spot but being driven by larger loan sizes rather than more refinance transactions, and growing hotel refinance sizes are being driven primarily by larger CMBS. Though CMBS ...

It’s been a challenging two and a half years for the commercial real estate (CRE) industry, but data points are gradually emerging that indicate we may be at or past a trough in market activity, at least for some asset classes. The Mortgage Bankers Association’s (MBA) second quarter release of CRE lending activity showed that commercial loan ...