The Ida Group

2017 Archive



Fourth Quarter

Briefs

Employment Bounces Back From Hurricanes’ Impact; Labor Shortages Temper Employment Growth

November 9; EMPLOYMENT BRIEF - Job creation rebounded, adding 261,000 positions in October after hurricane-related effects in Texas and Florida caused a significant slowdown in the September data.

Harvey and Irma Join Forces to Break 83 Month Job Creation Streak

October 20; EMPLOYMENT BRIEF - This year, having two major hurricanes strike the U.S. within weeks of each other created a setback, particularly for leisure and hospitality jobs.

 

Research Reports

New Tax Laws Subtly Affect Commercial Real Estate; Could Alter Capital Flows, Business Structures and Portfolio Strategies

December 7; NEW TAX PLAN - For real estate investors, the final versions [of the tax reform] appear relatively benign, with only modest changes to key provisions such as the 1031 tax-deferred exchange, mortgage interest deductibility and asset depreciation.

Incredibly Tight Labor Markets Encouraging Renter Demand; Peak Supply Coming Online

November; BAY AREA MULTIFAMILY - The robust demand for technology workers and other professional employment has pushed the broad region’s employment rate to a multidecade low, prompting surging demand for the limited housing stock that exists in the marketplace.

Evolving Restaurant Landscape Presents Opportunities and Challenges for Operators

October 31; RETAIL SPOTLIGHT - Shifting consumer preferences and the rise of social media applications such as Yelp and Urbanspoon are driving rapid change in the restaurant sector.

Investors Maintain Confidence in Medical Office Market Despite Uncertain Healthcare Law Changes

Healthcare reform has been a major topic of the new administration, and while efforts to repeal and replace the Affordable Care Act have thus far been unsuccessful, many legislators continue to press for change.


Third Quarter

Briefs

Booming Apartment Demand Underpinning Steady Growth in Retail Sales

August 21; RETAIL BRIEF - Core retail sales climbed 4 percent in July, driven by robust performance in key household formation sectors.

Millennial Homeownership Edging Higher, Young Adults Still Favor Apartment Lifestyle

August 16; HOUSING BRIEF - After falling to a five-decade low in the second quarter of last year, the homeownership rate is up almost a full percentage point to 63.7 percent
in June.

Job Creation Outpaces Expectations; Invigorates Commercial Real Estate Space Demand

July 13; EMPLOYMENT BRIEF - Accelerating job creation together with record-high employment openings have boosted confidence among younger workers, convincing many that now is the time to move out on their own.

 

Research Reports

Federal Reserve to Embark on Normalization; Balance Sheet Reductions to Influence Commercial Real Estate

September 5; FEDERAL RESERVE - Following the rounds of quantitative easing that pushed the Federal Reserve’s balance sheet to $4.5 trillion, the Federal Reserve has outlined plans to reduce the size of its holdings.

Harvey’s Impact Ripples Through Houston Real Estate Market

September; HURRICANE HARVEY - The severe storm displaced thousands of families as it damaged in excess of 200,000 homes across the region.

Often-Overlooked Investment Quietly Gathers Traction; Reinventing Suburban Office Sparks Refreshed Perspective

SUBURBAN OFFICE - Central Business District office markets garnered attention during the recovery as a variety of large companies announced relocations to downtown areas.

Pickup in Vacancy Amid Broad Rise In Development; Job Creation Moderating

BAY AREA OFFICE - While newly created jobs remain overwhelmingly skewed toward traditional office-using professions, the rate of growth has slowed dramatically.

Surging Net Absorption Buoyed by Lack Of Housing Amid Robust Bay Area Economies

BAY AREA MULTIFAMILY - The accelerating pace of growth in technology and startups in the Bay Area has driven unemployment rates to the lowest level since 2000, triggering demand for local housing options.

Tight Labor Markets Power Retail Strength As Development Rises in the Bay Area

BAY AREA RETAIL - Amid a surging Bay Area economy, job growth has soared, leading to unemployment rates that have reached the lowest point since the early 2000s.

oakland's booming industrial sector fueled by company expansions, lack of new supply

OAKLAND INDUSTRIAL - Demand among manufacturing, logistics, and research and development firms will remain steady this year as the pace of metro job creation reaches a high for this cycle.

Amazon Reinforces Importance of Brick-and-Mortar Presence, Leaps Into Grocery Business With Acquisition of Whole Foods

AMAZON - After testing a variety of concepts to enter the grocery store segment, Amazon recently announced an agreement to acquire Whole Foods Market for $13.7 billion. The purchase gives the e-commerce giant instant access to the grocery store business, which accounts for consumer spending of more than $636 billion per annum.

Political uncertainty weighs on investor sentiment

CRE INVESTMENT OUTLOOK - The commercial real estate market may face gradual softening with signs that investors are proceeding more cautiously on new investment.


Second Quarter

Briefs

Lower 10-Year Treasury Rate Reduces Debt Cost, But Buyer/Seller Perception Gap Still Prevalent

June 22; FEDERAL RESERVE BRIEF - A broad range of economic drivers including steady hiring, rising wages and retail sales growth have reiterated momentum, prompting the Federal Reserve to raise its benchmark rate by 25 basis points.

Tight Labor Market Restrains Job Creation, Offers Mixed Outlook for Commercial Real Estate

June 9; EMPLOYMENT BRIEF - The labor market tightened in May, pushing the unemployment rate to 4.3 percent, the lowest level since 2001. Employers added 138,000 jobs
as the labor market continued signaling economic expansion.

Household Formation, Confident Consumers Powering Retail Sales Growth

April 19; RETAIL BRIEF - Retail sales remained elevated in March as core retail sales rose 4.1 percent over the past year.

 

Research Reports

Vacancy Up Due to Elevated Class A Deliveries; Rising Rents Point to Positive Momentum

June 9; MULTIFAMILY SPOTLIGHT - The national apartment vacancy rate increased in the first quarter due to a combination of high Class A construction deliveries and historic fourth quarter absorption weakness being pushed into the first quarter.

Rising Development Slowing Rent Growth; Investor Demand Remains Elevated

BAY AREA RETAIL - A diverse Bay Area economy, driven by the high-tech and biotech segments, startups and financial services, is providing the leverage to power new household
formation and fuel retail spending.


First Quarter

Briefs

Fed Rate Increase Offers Mixed Results

March 22; FEDERAL RESERVE BRIEF - A positive economic outlook motivated the Federal Reserve to raise its benchmark rate by 25 basis points.

Retail Sales Boosted by Three Significant Trends; Some Retail Components Falling Behind

March 15; RETAIL BRIEF - Retail sales remained elevated in February, with core retail sales vaulting 4.4 percent over the past year, driven by three significant trends.

Payroll Growth Drives Property Performance; Some Uncertainty as Investors Await Tax Plan

March 10; EMPLOYMENT BRIEF - Healthy job creation in February illustrates a labor market riding considerable momentum. Job growth is bolstering commercial property performance improvements at a time when some uncertainty hangs over commercial property sales.

Homeownership Rate Falls to 12-Year Low; Young Households Favor Apartments

March 4; HOUSING BRIEF - Low inventory is restraining sales of existing single-family homes, which rose in January by just 3.7 percent from last year. Despite an uptick in
listings, the supply of available homes for sale held firm at a record-low 3.6 months.

Confident Consumers Trigger Retail Sales Growth

February 17; RETAIL BRIEF - Consumers followed up robust holiday spending with equally impressive activity in January as core retail sales vaulted 4.4 percent over the past year. Consumer confidence remains near the highest levels of the past decade, reflecting heightened expectations for economic conditions and sentiment.

Hiring Bounces Back in January, Offers Upbeat Commercial Property Outlook

February 3; EMPLOYMENT BRIEF - Broad-based and robust hiring during January extends last year’s labor market momentum. Other indicators were also positive last month and show a tight labor market, imposing a potential headwind for employers this year.

Single-Family Housing Supply Falls to Record Low, Tight Market Strengthens Apartment Demand

January 17; HOUSING BRIEF - Wage growth and rising household formation are generating healthy demand for housing. The for-sale market is stuck in neutral, however, as tight supply, rising mortgage rates and upward pressure on existing home prices have muted growth.

Employment Momentum, Accelerating Wages Support Real Estate Performance Outlook

January 9; EMPLOYMENT BRIEF - The employment market consistently signaled steady economic growth last year despite numerous unanticipated events that could have upended the expansion.

 

Research Reports

Investors Dial Back Transactions Amid Murky Policy Outlook; Clarity, Healthy Fundamentals Likely to Revive Activity

March 22; EMERGING TRENDS - Proposed changes to fiscal, tax and regulatory policies raise a host of questions that will influence investor decisions. Over the first two months of 2017, early estimates place commercial real estate transactions down by 20 to 25 percent compared with the same period last year.

President Trump to Reshape Central Bank on Heels Of Gov. Tarullo’s Resignation from Federal Reserve Board

February 22; FEDERAL RESERVE SPOTLIGHT - Gov. Daniel Tarullo recently announced his resignation from the Board of Governors of the Federal Reserve, effective in early April.

Drug Store Sales Bolstered By Aging Population, Business Model Evolution; Investors Enticed By Income Security and Extended Lease Terms

February 3; RETAIL SPOTLIGHT - Pharmaceutical innovation that offers new treatments for a range of maladies together with a greater number of people with medical insurance have lifted prescription drug spending 9 percent over the past year.

Industry Adapting to Evolving Consumer Preferences; Holiday Sales Reflect Bright Consumer Outlook

January 17; RETAIL SPOTLIGHT - An upbeat holiday shopping season propelled retail sales over the November and December period to a 4 percent gain on a year-over-year basis, outpacing the 10-year average of 2.5 percent growth.