Investments
Investments in Commercial Real Estate
Is Commercial Real Estate heading for a bubble? Near term predictors say”no”. However, it is important to look at a 3-5 year supply and demand forecast before investing. Industrial as an asset is up over 22% during the pandemic. Revenues for industrial properties are up +11% and vacancy rates are as low as 4%. It is a similar situation for apartments. Near term forecasts for apartments is for high asking prices. Predictions for apartments are record low cap rates near term.
Apartment investments
The average price per unit for apartments is up 12% since 2019. Revenues are up approximately 1.5% for multi-family with vacancies at record lows around 2.2%. This runs in alignment with housing shortages. Demand for apartments should continue near term.
Self storage investments
Self storage pricing is seeing increases as well. Millennials are driving approximately 39% of self storage demand. The demand is due to the inability to enter the home buying market.
- Sales pricing up 15.5%
- Revenues up 17%
- Vacancy at record lows
Office prices
Offices prices are down nationwide approximately 2.2%. Revenues are down almost 10% with Austin vacancy hovering at 21%.
- Pricing for Austin Offices and properties is still high.
- More construction will potentially lower pricing if the demand starts to wane.
- However, forecasts are for more population growth and with that comes more demand, only the future can tell.
Shire Commercial has helped clients find suitable ivestment solutions since 2004. The near term message for Austin for 2022 is, do not plan on getting sub market deals. They are few and far between and tend to be lower class properties. Contact Shire Commercial!