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Declining Sales Volume Ahead For US Real Estate, Economist Warns

January 29, 2018/in News, Rumors, Trends/by SFOBA STAFF

Economist Hugh Kelly offered a sobering overview of trends that he believes mark the downside of the current cycle at CREW-Miami’s 2018 Economic Outlook luncheon. CLICK ON THE HEADLINE FOR MORE

The Forum Office Buildings Trade In $22.5 Million Deal

January 21, 2018/in Done Deals, News/by SFOBA STAFF

A subsidiary of Triarch Capital Group acquired the property. CLICK ON THE HEADLINE FOR MORE

Declining Sales Volume Ahead For US Real Estate, Economist Warns

January 29, 2018/in News, Rumors, Trends/by SFOBA STAFF

Economist Hugh Kelly offered a sobering overview of trends that he believes mark the downside of the current cycle at CREW-Miami’s 2018 Economic Outlook luncheon. CLICK ON THE HEADLINE FOR MORE

The Forum Office Buildings Trade In $22.5 Million Deal

January 21, 2018/in Done Deals, News/by SFOBA STAFF

A subsidiary of Triarch Capital Group acquired the property. CLICK ON THE HEADLINE FOR MORE

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Declining Sales Volume Ahead For US Real Estate, Economist Warns

January 29, 2018/in News, Rumors, Trends/by SFOBA STAFF

Interest rates are creeping up, confidence in the dollar is waning and real estate transaction volume keeps slipping despite an abundance of investment capital.

Combine those factors and you have a recipe for a looming recession, according to economist Hugh Kelly.

“It’s not just about preparing ourselves for a slowdown three, four years down the road, but also for a contraction,” said Hugh Kelly, principal of Hugh Kelly Real Estate Economics, at CREW-Miami’s 2018 Economic Outlook luncheon in Miami on Wednesday. “Now is the time to begin thinking about how do you prosper in economic contracting conditions.”

Kelly offered a sobering overview of trends that he believes mark the downside of the current cycle.

“Ambitious projections of growth are not going to be achieved,” Kelly said. “I see another year in declining volume in the real estate business.”

The chances of the country’s economic recovery, the second longest in the nation’s history, continuing into next year are not looking good, Kelly noted. “Keeping it going into the summer of 2019, I think, is a riskier bet,” he said. “Confidence in the U.S. dollar and in our ability to sustain the amount of growth we have been seeing is slipping. These are reasons we should begin to prepare for the end of the cycle.”

An alarming uptick in natural disasters is another factor that will hurt the real estate industry in the next decade, Kelly said, which should raise alarms in hurricane-prone South Florida. In the 1980s, there were 43 natural catastrophes on an annual basis around the world, Kelly said. Since 2011, the number has jumped to 82 per year.

That means home insurance premiums are likely to go up and could have a negative impact on residential home sales. Storms, wildfires and floods resulted in nearly $300 billion in insurance claims last year, Kelly said.

“There are only two ways for insurers to pay for increasing costs,” he added. “Either increase premiums or dip into investment returns. When you have $289 billion in claims, that is going to be costly for everybody.”

Source: The Real Deal

The Forum Office Buildings Trade In $22.5 Million Deal

January 21, 2018/in Done Deals, News/by SFOBA STAFF

CBRE arranged the sale of The Forum in West Palm Beach.

The 185,089 sq.ft. property, consisting of two multi-tenant office buildings and a four-story structured parking garage, is located at 1665 Palm Beach Lakes Blvd.

A subsidiary of Triarch Capital Group acquired the property for $22.5 million.

CBRE’s Miami-based Capital Markets team facilitated the sale on behalf of the seller, Crimson Peak and Panther Capital Management. Vice Chairman Christian Lee oversaw the transaction alongside Senior Vice President José Lobón and Vice President Amy Julian. The Capital Markets team representing the seller also included Financial Analysts Marcos Minaya and Joseph Chick.

Neil Merin of NAI/Merin Hunter Codman and Jonathan Kingsley of Colliers also worked on the transaction.

“The Forum features unparalleled connectivity to Interstate 95, great access to West Palm Beach’s major transportation hubs, the highest covered parking ratio among its peers and an unrivaled amenity base that includes an on-site hotel that will become the winter home to the Houston Astros,” said Christian Lee, vice chairman, CBRE Capital Markets.

Located a half mile east of Interstate 95, the property offers tremendous transportation dynamics–over half of South Florida’s 6 million residents live within a one-hour drive from the property. Additionally, the property is adjacent to the Palm Beach Outlet mall.

“The West Palm Beach submarket has seen five straight years of positive net absorption resulting in a 670-basis point decline in vacancy and 18% market rent growth,” commented José Lobón, Senior Vice President, CBRE Capital Markets. “Combined with a lack of any new office construction underway in the submarket, the outlook is positive for further vacancy decline and market rent growth.”

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Declining Sales Volume Ahead For US Real Estate, Economist Warns

The Forum Office Buildings Trade In $22.5 Million Deal

Declining Sales Volume Ahead For US Real Estate, Economist Warns

The Forum Office Buildings Trade In $22.5 Million Deal

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Declining Sales Volume Ahead For US Real Estate, Economist Warns

“Ambitious projections of growth are not going to be achieved,” Kelly said. “I see another year in declining volume in the real estate business.”

“There are only two ways for insurers to pay for increasing costs,” he added. “Either increase premiums or dip into investment returns. When you have $289 billion in claims, that is going to be costly for everybody.”

The Forum Office Buildings Trade In $22.5 Million Deal

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