Commercial Real Estate Investment Market Poised for Growth in 2014

The fourth quarter of 2013 set the pace for Commercial Real Estate in 2014. With more inquiries, triple digit spreads between cap rates and Treasury notes, and higher rents, 2014 looks like it will be a great year for Commercial Real Estate. Front Street is excited to see what 2014 holds for Gainesville Commercial Real Estate. 

By CCIM Institute's Quarterly Trends Report

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The last quarter of 2013 for the commercial real estate investment market set the pace and tone for 2014. Nearly 60 percent of CCIM Institute’s national membership indicated they experienced more transactions in 4Q13 than the same period the prior year, according to the organization’s 4Q13 Quarterly Market Trends report.

The report, which features data collected from CCIM members nationwide and is conducted in conjunction with the National Association of Realtors®, also shows that 61 percent of respondents received more serious inquiries related to buying commercial real estate. Property sectors that saw the most deal activity included:

  • Hospitality: 75 percent of CCIM’s saw an increase in deals with hospitality properties
  • Office: 64 percent of CCIM’s saw greater deal flow in the office sector
  • Industrial and Multifamily: 56 percent of members who work with industrial and apartment properties saw a rise in deals
  • Retail: 51 percent of CCIM’s in the retail sector saw an increased deal volume

“With triple-digit spreads between capitalization rates and Treasury notes providing a large cushion, investors’ risk appetite broadened, driving commercial investments to a strong finish in 2013,” according George Ratiu, director of quantitative and commercial research for NAR. “With a favorable economic outlook coupled with rising capital availability, commercial real estate markets are well-positioned for continued growth in 2014.”

Higher rents were also reported with 48 percent of CCIM’s indicating they are observing higher rental rates across all property types over the same period last year, and 35 percent of members experienced similar rents year over year. Almost half (45 percent) of respondents expect rents and prices to move together in the next one to three years with 23 percent predicting rent growth will outpace price growth and 32 percent indicating the opposite, with prices expected to outperform rents.

The complete report findings can be found at http://www.ccim.com/resources/fourth-quarter-2013-quarterly-market-trends.


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Nick Banks

Nick created Front Street Commercial Real Estate Group in 2002 and spent the first eight years developing and acquiring office and retail projects in South Florida as well as North Central Florida. In 2010 the focus of the firm was shifted to primarily serve third party clients and perform brokerage, property management and mortgage banking functions. Nick has personally developed and acquired nearly 200,000 square feet of office and retail properties in markets throughout Florida. Prior to founding Front Street, Nick was the Director of Finance and Dispositions for Stiles Corporation in Fort Lauderdale where he financed and sold over $500 million in commercial real estate. Before joining Stiles, Nick was an Associate Director at GE Capital Real Estate where he sourced over $200 million in financing throughout Florida. Nick is a graduate of the University of Florida with a degree in Finance and a concentration in Real Estate. He serves as a board member and current vice-chair for the United Way of North Central Florida where he also chairs the Development Committee. Nick is actively involved with the Gainesville Area Chamber of Commerce where he serves as a board member and committee member for the Council for Economic Outreach. He is also a recent graduate of Leadership Gainesville which is a year long leadership program hosted by the Chamber. He is a member of Grace United Methodist Church where he has served as finance chair and as a member of the leadership council. Nick serves as an advisory board member of the University of Florida Bergstrom Center for Real Estate Studies. Nick was recently named chair of the Gainesville committee for the North Florida chapter of Urban Land Institute (ULI). He is a licensed real estate broker in the State of Florida and is a long time member of the International Council of Shopping Centers.

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