Commercial Real Estate News Brief: August 2018

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Every month, JLL’s regional team curates the top commercial real estate industry news to keep you in-the-know. In this month’s edition, JLL spotlights back-to-school shopping trends, how foreign investors view U.S. CRE and the record-high funding for construction technology startups.

What Back-to-School Shopping Means for Big Retailers

RE Journals recently reported on how lucrative back-to-school shopping can be for big-name retailers, specifically Walmart and Target.JLL Back to School Shopping - August News Brief

According to JLL data, most parents plan to spend less than $250 on back-to-school supplies this season. However, about 16% of parents plan to spend more than $500 on their children’s supplies, and these high-spenders provide a nice bottom-line boost.

Where are parents planning to spend?

  • 50.3% of parents plan on back-to-school shopping at Walmart.
  • 47.4% plan on Target.
  • 15.8% plan on Amazon.
  • 9.9% plan on Staples.

It’s also worth noting that a majority of parents plan to visit just one or two stores, while 46.3% will shop around. Expect one big receipt as opposed to multiple small stops this season.

Foreign Investors are Still Betting on U.S. Commercial Real Estate

An article from Mortgage Professional America citing National Association of Realtors data shows that foreigners still see commercial real estate (CRE) in the United States as a healthy investment.

These foreign investors are mainly from China (20%), Mexico (11%), Canada (8%) and the United Kingdom (6%), and they see Florida, Texas and California as hot spots. These were the most popular buyer and seller destinations for commercial property in 2017.

Buyer-side transactions had a median value of $975,000, while seller-side transactions recorded a $1 million median. Overall, international CRE transactions are typically at the higher end of the market with a median value of $625,000. Most of these buyers are also closing deals with cash; only 25% of commercial deals involved financing from U.S. sources.

ConTech Startup Investment Is at a Record High

Investors are pouring funding into construction technology startups at a record pace, with big implications for the real estate industry, according to JLL’s The Investor. We’re talking $1.05 billion in the first half of 2018 alone.

The construction industry is headed towards major disruption that will boost productivity and cut the time and costs of construction projects. InSite is one tool that offers this kind of opportunity. The 3D walk-through tool can shorten project cycles and cut costs by 35%, says Todd Burns, President of Project and Development Services, JLL.

The main tech areas attracting investors include collaboration software, offsite construction, big data and artificial intelligence.

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