Commercial Real Estate News Wrap Up From Liberty SBF

October 14, 2016

The recent $13.6 billion merger between Marriott and Starwood hotels is bound to create shockwaves across the hotel industry, as highlighted in a recent Bisnow conference. Andy Coleman, senior managing director of Berkadia, highlighted the upcoming challenge for lenders, stating, “So if we’re financing a Westin (a Starwood brand) and there’s a full-service Marriott across the street, [you need to ask] what’s the relationship between these hotels going to be?” Another topic highlighted was the opportunity for alternative hotel brands, who will attract investors looking to place capital in a now more competitive field.

The U.S property market landscape in 2017 is expected to be characterized by continued strong fundamentals, increased investor flows, and high transaction volume. As explained in a recent article by National Real Estate Investor, commercial real estate investors can expect the following five trends to play a significant role in 2017: global economic and political uncertainties, a low interest and cap rate environment, foreign investment in the US, a slowing new supply, and volatile energy markets. Impact is expected to vary considerably by region and sector, notable areas to watch out for include New York, Houston, and Chicago.

A new economic forecast finds that California and the Inland Empire region are both on track to outperform the nation over the next year or more. Christopher Thornberg, director of the UC Riverside School of Business Center for Economic Forecasting, believes the optimism behind this outlook stems from the external headwinds facing these economies. He expects that current drags that have slowed US exports and hurt commodity industries will continue to lessen, and that California and the Inland Empire area will reap the benefits combined with increasing median real wages and strengthening national labor markets.

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