Single-family rebound boosts industrial real estate.

Position:Commercial
 
FREE EXCERPT

Rebounding single-family home starts and sales could benefit commercial real estate as well--especially the industrial market--reported CBRE, Los Angeles.

The Commerce Department reported in May that new housing starts rose more than 20 percent in April over the previous month to a seasonally adjusted annual rate of 1.135 million--the strongest month since November 2007 and the biggest monthly percentage increase since April 1991.

The Mortgage Bankers Association (MBA) forecasts housing starts, which finished 2014 at 1.00 million units, should increase to 1.07 million by the end of 2015 and to 1.23 million by end of 2016, and the National Association of Realtors[R] (NAR), Chicago, said new starts could reach 1.4 million units in 2016.

"All of the raw materials and finished goods that contribute to a new home flow through the supply chain and spend some time in an industrial property," said CBRE Americas Head of Industrial Research David Egan. "The increase in both new-home construction and existing sales provide another reason to expect continued strong performance of the U.S. industrial market."

Egan said new single-family permit applications, which correlate strongly with near-term construction, increased 10.1 percent in April compared with March.

CBRE said declining unemployment rates and the prospect of stronger wage growth among a broader portion of the labor...

To continue reading

FREE SIGN UP