According to Deloitte’s commercial real estate outlook for 2017, developers, builders and investors in the real estate realm are approaching the industry with cautious optimism, in hopes it will grow.
The report goes on to credit swift technological advancement, massive shifts in demographics and a transitional regulatory climate as the primary sources of influence on profitability today. However, despite the somewhat intimidating steps to overcome, many are continuing to maintain a competitive edge.
Just look at the numbers. In a Q3 2016 U.S. Economic Forecast, Deloitte estimated that GDP is slated to grow by 2.5 percent in 2017, which could help maintain steady industry growth. Plus, consumer confidence is set to rise with a decreasing unemployment rate, largely due to the number of retiring Baby Boomers.
Investors will be faced with the challenge of leveraging new trends in technology in order to adhere to consumer preferences, according to the 2017 outlook. If utilized, technologies such as the Internet of Things (IoT), cloud computing and advanced analytics will make all the difference.
While it’s clear that there’s hope for the future of commercial real estate nationwide, it’s also important to take a close look at markets by niche. This week, we’ve opted to look at the booming market of Mesa, AZ. (You may remember, the city made headlines just months ago after Apple announced its intention to maintain a global command center for its data operations).
Here’s a quick rundown on the health of the commercial market, compiled by LoopNet:
Multifamily
The latest data shows that median asking prices per unit fell -1.6 percent in comparison to the three months prior to the data being recorded. In comparison to last year, median asking prices increased by +10.5 percent. In Mesa’s county of Maricopa, median asking prices are 3.8 percent higher at $68,231 per unit in comparison to $71,033 in Mesa. The average median price in state of Arizona is $55,531.
Office
The median asking price per square foot in Mesa decreased by -1.1 percent over the three months prior to the report being released. In comparison to last year, the number is up +7.8 perecent. Countywide, asking prices are 2.1 percent higher, standing at $148 per square foot. In Mesa, the median price is $136 per square foot. The average rental price per square foot in Mesa is $15.63, which is an increase of .4 percent over the previous three months to the report’s release; countywide property rent went up by .9 percent during the same period.
Industrial
The median asking price per square foot fell by -2.8 percent over the previous three months to the report. Over the last year, it’s increased by +13.1 percent. In Maricopa, asking prices per square foot have gone up by 3.2 percent over the last three months, at $97. In Mesa, the median price is $106 per square foot. Average rental rates stand at about $8.36 in Mesa, which is a .4 percent increase from last year. Rates are also up in the county by .8 percent at $7.92 per square foot.
Retail
The median asking price has gone up +3.5 percent over the last three months prior to the report’s release and +11.2 percent since last year. Prices per square foot are 1.3 percent higher in the county at $179 per square foot in comparison to $147 in Mesa. Rental rates sit at $11.34 in Mesa and they’ve gone down by -7.5 percent over the last year. Rates are .4 percent higher at $13.77 per square foot in the county.
