You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur. FOR OVER 20 YEARS, I HAVE WORKED EXTENSIVELY WITH OWNERS AND BUYERS IN LAND, COMMERCIAL AND INVESTMENT REAL ESTATE IN PHOENIX, TUCSON AND THROUGHOUT ARIZONA. PLEASE LET ME KNOW HOW I CAN HELP YOU. Call me if you want to sell your property and need an estimated value. Phone / Prefer cell: 520-975-5207
Office: 480-948-5554 or email me walterunger@ccim.net. – What is a CCIM.
In Business and in Life you don’t get what you deserve, you get what you Negotiate.
contact me if you want me to get you the value of your property.
CLICK HERE TO VIEW ALL MY LISTINGS.
Are you ready to sell or purchase your Land or Commercial Building in Phoenix, Scottsdale, Maricopa County and Pinal County, Arizona, please call me?
Walter Unger CCIM – cell: 520-975-5207 – walterunger@ccim.net
Record-Breaking Rent Growth Has Helped Buoy Asset Pricing
By Adrian Ponsen and Chad Littell
CoStar Analytics June 8, 2023
Since early 2022, the U.S. Federal Reserve has gone all-in on its efforts to curtail inflation, raising its key policy instrument, the rate at which banks can borrow and lend overnight reserves, at the fastest pace in more than 40 years.
The effects of these policy actions have rippled across nearly every real estate asset class, and newly built logistics properties, which have been the darling of commercial real estate investors during the pandemic, have been no exception.
CoStar data shows that as interest rates have increased, the average capitalization rate on sales of U.S. distribution centers less than three years old has risen from an all-time low of 3.6% in early 2021, to 4.8% year-to-date in 2023.
A 120-basis point increase in capitalization rates over 2021 levels should equate to a 25% decline in value, assuming no income growth. However, this basic assumption merely shows the need for further analysis to take into account what logistics property owners are seeing in real time. Despite the significant uptick in capitalization rates, all-time high rental rate growth has helped limit value declin
Beginning in 2015, warehouse/distribution rental rates increased at an annualized rate of 6% leading up to the outbreak era. As consumer spending patterns abruptly changed in 2020, tenants scrambled to find suitable properties to hold larger product inventories, and annual rental rate growth more than doubled to 14%. Today, three years after the initial shock of the pandemic, easing supply chains have led to only a modest pullback in annualized rental rate growth in the logistics segment, now at 10%.
Recent sales illustrate how this steady rent growth has helped to offset the negative impact of increasing cap rates on logistics property values. For example, two transactions involving nearby single-tenant distribution centers in Southern California reflect price declines of only 10% to 15%, despite higher cap rates that in the absence of significant rent growth, would have resulted in value declines of about 25%.
The two newly built facilities were recently leased, fully occupied, and sold a year apart. The former was priced to a 3.1% cap rate at $383 per square foot in the fourth quarter of 2021, while the latter posted a 4.3% going-in yield at $332 per square foot in the first quarter of 2023.
Despite the recent surge in industrial cap rates, which typically has a negative effect on asset prices, industrial property values remained stable compared to other property types. The national asking rent growth picture is much different for office, multifamily and retail assets, expanding at a markedly slower year-over-year pace of 0.8%, 1.7%, and 3.6%, respectively, which could limit their ability to ward off lower valuations ahead. Furthermore, industrial facilities with shorter lease terms appear better positioned to benefit from higher rent growth by marking in-place rents to market as leases roll over.
In states where large numbers of recently built distribution centers have sold since 2018, the trailing 12-month average price per square foot for these properties has plateaued or begun to fall over the past several months, but the decline is less than 8% from peak levels reached in 2021.
Trailing 12-month prices for these assets should continue to moderate in the months ahead as more of the transactions included in the average fully encompass the impact of the Fed’s interest rate increases. So far, however, pricing for prime logistics properties has proven relatively resilient given the significant expansion in capitalization rates that has already taken place.
See it all with Graphs: https://product.costar.com/home/news/shared/778685267?utm_source=newsletter&utm_medium=email&utm_campaign=insights&utm_content=p1&t=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJjb250YWN0SWQiOiIyMTM0MDg5IiwiY3VsdHVyZUNvZGUiOiJlbi1VUyIsImlhdCI6MTY4NjU5Mjg5Nn0.buhyhVab9LNTt5cg5fBXaBez_QCtA1O-fne_sew9fyg
FROM ME: FOR OVER 20 YEARS, I HAVE WORKED EXTENSIVELY WITH OWNERS AND BUYERS IN LAND, COMMERCIAL AND INVESTMENT REAL ESTATE IN PHOENIX, TUCSON AND THROUGHOUT ARIZONA. Now is the time, if you are thinking of selling or purchasing your Land or Commercial Building in Phoenix, Scottsdale, Maricopa County, Pinal County, Arizona / Office / Retail / Industrial / Multi-family / please call me on my cell 520-975-5207 or e-mail me walterunger@ccim.net. Investors and Owner / Users need to really know the market today before making a move. The market has a lot of moving parts. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands your needs. I am marketing my listings on Costar, Loop-net, CCIM, CREXi, Catylist, and various other web sites. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also international
DISCOVER WHAT IS HAPPENING IN ARIZONA
History of Arizona from 900 BC – 2017 -Timeline.
What is a CCIM. In Business and in Life you don’t get what you deserve, you get what you Negotiate.
contact me if you want the me to get you the value of your property.
Walter Unger CCIM – cell: 520-975-5207 – walterunger@ccim.net
Click here to find out what is a CCIM:
CLICK HERE TO VIEW ALL MY LISTINGS.
Are you ready to sell or purchase your Land or Commercial Building in Phoenix, Scottsdale, Maricopa County and Pinal County, Arizona, please call me?
Walter Unger CCIM
Associate Broker
West USA Commercial Division
14350 N. 87th. Street, Suite 180
Scottsdale AZ, 85260
Phone: 480-948-5554
Cell: 520-975-5207
History of Arizona from 900 BC – 2017 -Timeline.
History of Arizona from 900 BC – 2017 -Timeline.
WHY PHOENIX? AMAZING!!! POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”
- DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
Walter Unger CCIM – walterunger@ccim.net – 1-520-975-5207 – http://walter-unger.com
Timeline of Phoenix, Arizona history
Facts of Arizona – year 1848 to 2013
CLICK HERE: Arizona Opportunity Zones As We Understand /maps. Interested!!! Please contact me.
Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
Walter Unger CCIM
Associate Broker
West USA Commercial Division
14350 N. 87th. Street, Suite 180
Scottsdale AZ, 85260
Phone: 480-948-5554
Cell: 520-975-5207
FOR OVER 20 YEARS, I HAVE WORKED EXTENSIVELY WITH OWNERS AND BUYERS IN LAND, COMMERCIAL AND INVESTMENT REAL ESTATE IN PHOENIX, TUCSON AND THROUGHOUT ARIZONA. PLEASE LET ME KNOW HOW I CAN HELP YOU PLEASE CALL ME
CLICK HERE TO VIEW ALL MY LISTINGS.
Also Call me if you need an estimated value of your Property.
Call me if you want to see a map with what is in the Construction Pipeline for Apartments.
Prefer cell: 520-975-5207, or email me walterunger@ccim.net. CLICK HERE TO VIEW ALL MY LISTINGS.
Check out my professional profile and connect with me on LinkedIn.
Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207
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