3RD QUARTER CRE UPDATE; PERFORMANCE TRENDS TO WATCH IN THE RETAIL, OFFICE, AND HOSPITALITY SECTORS
Office Performance Heavily Segmented
- Since 2019, overall office vacancy rose 470 basis points; however, much of the increase is in a few subgroups
- Small, suburban offices retained tenants effectively, while modern office buildings have also avoided vacancy surges
Retail Success Gaining Investor Attention
- Despite fears that e-commerce would severely impact retail assets, suburban centers have become an industry darling
- Retail vacancy is still in line with historic lows as 2023 holiday spending remains strong
Hospitality KPI’s Rising To New Highs
- While select service properties recovered quickest from the pandemic, higher-end hotels are now recovering occupancy at a heightened pace
- ADR and RevPAR at record levels across hotel type has led to increased attention to hospitality assets as some other property types see fundamentals soften
Sources: Marcus & Millichap Research Services
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