Business Monitor International


United States Real Estate Report

Published 22 July 2014

  • 69 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,295.00
United States Real Estate Report

BMI maintains a bullish view on the US's Commercial Real Estate sector. There are several factors underpinning BMI's positive outlook for the upcoming quarters. Firstly, providing key support for the real estate sector is the growth of the energy and technology sectors. These industries are leading the demand for office real estate. Secondly, supporting the retail segment broad trends supporting stronger real personal consumption expenditure (PCE) growth remain in place, and as such we expect real PCE growth to continue to accelerate in 2014. Thirdly, the improved outlook for the economy and recovering unemployment figures will support all three real estate segments.  Jones Lang LaSalle reports that while 1.7mn office jobs were lost during the recession, 2.8mn were regained during the recovery. Areas such as San Francisco, Texas and the Sun Belt are recording the strongest job growth numbers at 4%.

Commercial real estate (CRE) expansion is dependent on a healthy macroeconomic environment. During Q413 we revised down our estimate for 2013 US real GDP growth from 2.1% to 1.8%, but we maintain that the US economy is gaining steam and is set for more rapid expansion. We have upgraded our 2014 real GDP growth forecast from 2.7% to 2.8% with growth set to average 2.4% a year from 2013-2018. A major factor in this improving economic outlook has been the improvement in US job creation and we have revised down our end-2013 and end-2014 unemployment rate forecasts from 7.5% and 7.2% to 7.2% and 6.8% respectively on the back of stronger than expected job gains.

With a focus on the cities of New York, Los Angeles, Chicago, Dallas and Philadelphia, the report covers the rental market performance in terms of rates and yields and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of economic on a market that can dictate regional performance. We expect the cautious recovery seen across the US...

Table of Contents

BMI Industry View
7
SWOT
9
Political
11
Economic
12
Business Environment
13
Industry Forecast
14
Office
14
Table: Forecast Rents - (USD per m2/month)
14
Table: Forecast Net Yield, 2010-2017 (%)
14
Retail
15
Table: Forecast Rents - (USD per m2/month)
15
Table: Forecast Net Yield, 2010-2017 (%)
15
Industrial
16
Table: Forecast Rents - (USD per m2/month)
16
Table: Forecast Net Yield, 2008-2017 (%)
16
Construction And Infrastructure Forecast Scenario
17
Table: US Construction And Infrastructure Industry Data, 2010-2016
17
Table: US Construction And Infrastructure Industry Data, 2015 - 2021
18
Macroeconomic Forecasts
26
Economic Outlook
26
Weakness In Most Categories of GDP
30
Table: United States - GDP By Expenditure, Real Growth %
30
Risks To Outlook
37
Industry Risk Reward Ratings
38
Developed States Risk/Reward Ratings
38
Table: Real Estate Risk/Reward Ratings
38
Business Environment Outlook
38
Table: BMI Business And Operation Risk Ratings
38
Table: BMI Legal Framework Rating
41
Table: Labour Force Quality
43
Table: Trade And Investment Ratings
44
Table: Top Export Destinations, US$mn
46
Market Overview
48
Office
56
Table: Net Yield, 2011-2012 (%)
59
Table: Terms of Rental Contract/ Leases - H212
59
Retail
59
Table: Historic Rents - 2011-2012 (USD per m2/month)
63
Table: Net Yield, 2011-2012 (%)
63
Table: Terms of Rental Contract/ Leases - H212
64
Industrial
64
Table: Historic Rents-2011-2012 (USD per m2/month)
66
Table: Net Yield, 2011-2012 (%)
66
Table: Terms of Rental Contract/ Leases-H212
67
Competitive Landscape
68
Table: EQS Data
71
Company Profile
72
Bechtel
72
Fluor Corporation
78
KBR
80
Turner Construction Company
82
Demographic Forecast
84
Table: The United States' Population By Age Group, 1990-2020 ('000)
85
Table: The United States' Population By Age Group, 1990-2020 (% of total)
86
Table: The United States' Key Population Ratios, 1990-2020
87
Table: The United States' Rural And Urban Population, 1990-2020
87
Methodology
88
How We Generate Our Industry Forecasts
88
Construction Industry
89
Bank Lending
90
Real Estate/Construction Business Environment Rating
90
Table: Weighting Of Indicators
91
Sources
93

The United States Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's United States Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in United States.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for United States to test other views - a key input for successful budgeting and strategic business planning in the American real estate market.
  • Target business opportunities and risks in United States through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Industry Forecast Scenario

Historical data series (2010-2012) and forecasts to end-2018 for the domestic real estate industry and for the local and global finance industry. Indicators include:

Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)

Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%)

Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$)

Business Environment Rankings

BMI's Real Estate Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (real estate vendors, construction companies and financial investors) in the regional real estate market.

The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc