Gary Richetelli recaps an article that details predictions for commercial real estate trends in the United States throughout all of 2015.

1. C O M M E R C I A L R E A L E S TAT E T R E N D S
O F 2 0 1 5
G A RY R I C H E T E L L I :

2. • Contributors of the Magazine of the Urban Land Institute, Peter
Burley and David Lynn, published an article earlier this year about
the potential trends for 2015 commercial real estate based on
trajectories from the entirety of 2014.

3. • Though there are many variables that determine trends of
commercial real estate for the United States, here is a recap on what
the two predicted would be the movement of 2015 commercial real
estate:

4. • The first thing Burley and
Lynn noted was that there
would be increased
allocations and capital flows.
• Since many institutions,
including high-net-worth
investors, were under
allocated to real estate, and
there were many strong four-
to-five year performance
increases of NCREIF and
NAREIT, expectations
concluded that commercial
real estate investment
capital would increase.

5. • According to Burley and Lynn, “The significant amount of capital
would be vexing if not for the fact that real estate seems to offer
some of the best risk/reward propositions around, particularly given
the multi-year run-up in equity and bond values,” (Six Trends in
Commercial Real Estate to Watch For in 2015).

6. • Their next prediction was that industrial real estate would continue its
steady improvement.
• Prior indications noted that economic slowing overseas undermined
growth for some major ports and large airports, but despite this
information, demand for industrial space has been growing
consistently throughout the year.

7. • An increase in consumer spending on furniture and electronics in
particular led to an influx in economic recovery, which shows little sign
of slowing down at any point soon.

8. • Another major trend
Burley and Lynn
pointed out in their
article was that the
multifamily commercial
investments would still
be popular through
2015.

9. A C C O R D I N G T O T H E A RT I C L E :
• “Multifamily transaction volume has reached pre-
recession levels, outstripping office transactions for the
first time in ten years, as real estate investment trusts
(REITs) and pension funds have fed a fierce appetite for
the multifamily sector. The pace is unlikely to slow
anytime soon. Apartment demand has been - and is
expected to be - robust, supercharged by the shock
waves of the recession and by strong demographic
trends that are only beginning to manifest,” (Six Trends
in Commercial Real Estate to Watch For in 2015).

10. • In addition, cap rates fell back 6 percent in 2014 and most deals
took place in large urban markets like LA, New York, and
Washington DC.

11. • For further information on Burly and Lynn’s commercial market
predictions for the rest of 2015, you can find their article here:
• http://urbanland.uli.org/economy-markets-trends/six-trends-
commercial-real-estate-watch-2015/