Domestic Real Estate Benefits

Much of the world's economy is troubled, or at least weaker than it has been recently, yet the U.S. economy continues to be one of the bright spots worldwide.

Much of the world’s economy is troubled, or at least weaker than it has been recently, yet the U.S. economy continues to be one of the bright spots worldwide. That was one of the takeaways of a speech last week by World Bank managing director and COO Sri Mulyani Indrawati at the National Association of Business Economics Conference in Washington, D.C.

“The global economic environment is weak and fragile and getting more volatile,” she noted. “The only engine of growth is the U.S. economy, while Europe is still struggling to recover and is now facing additional downside risks from a looming Brexit and an ongoing refugee crisis. Japan is responding to continued weak growth by loosening their monetary policy and adopting negative rates.”

Sri Mulyani also said that emerging economies and developing countries—engines of growth during the last decade—are also underperforming. Brazil and Russia are in recession and China is slowing down. Global trade is not picking up and productivity growth remains weak.

Though the World Bank COO didn’t specifically talk about real estate, the fact that the U.S. economy remains strong while the rest of the world lags does have implications for domestic CRE, and especially the flow of investment capital into the U.S. Economies such as China’s might be relatively weak, but that doesn’t mean that investment capital for U.S. properties—considered a safe haven that offers strong returns—has dried up completely. In fact, U.S. CRE still beckons.

For instance, just over the weekend, it was reported that the historic Hotel del Coronado near San Diego were being acquired by a Chinese insurance company as part of a $6.5 billion deal for a portfolio of hotels. Blackstone Group agreed to sell its Strategic Hotels & Resorts Inc., which owns 16 hospitality properties, to Anbang Insurance Group, after purchasing it in September 2015.

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Multifamily Property Asking Price Index - Sale Trends

Current Denver market trends data indicates a decrease of -3.9% in the median asking price per unit for Multifamily properties compared to the prior 3 months, with an increase of +21.0% compared to last year's prices. County-wide, asking prices for Multifamily properties are -3.4% lower at $175,546 per unit compared to the current median price of $180,847 per unit for Multifamily properties in Denver, CO.

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Office Property Asking Price Index - Sale Trends

Current Denver market trends data indicates an increase of +1.4% in the median asking price per sq ft for Office properties compared to the prior 3 months, with an increase of +11.0% compared to last year's prices. County-wide, asking prices for Office properties are -0.7% lower at $201 per sq ft compared to the current median price of $192 per sq ft for Office properties in Denver, CO.

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Industrial Property Asking Price Index - Sale Trends

Current Denver market trends data indicates an increase of +10.6% in the median asking price per sq ft for Industrial properties compared to the prior 3 months, with an increase of +32.1% compared to last year's prices. County-wide, asking prices for Industrial properties are 8.1% higher at $127 per sq ft compared to the current median price of $136 per sq ft for Industrial properties in Denver, CO.

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Retail Property Asking Price Index - Sale Trends

Current Denver market trends data indicates an increase of +3.4% in the median asking price per sq ft for Retail Commercial properties compared to the prior 3 months, with an increase of +20.8% compared to last year's prices. County-wide, asking prices for Retail Commercial properties are 0.8% higher at $228 per sq ft compared to the current median price of $221 per sq ft for Retail Commercial properties in Denver, CO.

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