Performance Trends to Watch – 3Q CRE Update

3RD QUARTER CRE UPDATE; PERFORMANCE TRENDS TO WATCH​

Industrial Demand Positive For More Than A Decade​

• Rent Growth of nearly 10% in the last 12-months highlights the sectors rise as an investment vehicle ​

• Construction is at record levels in 2023, but much of this new supply will be in the top industrial demand markets​

Supply Pressure Impacting Apartment Vacancy​

• Record construction levels in the sector have contributed to rising vacancy, but rent growth remains positive thus far​

• New construction pressure should begin to abate in 2025​

Self-Storage Effective Rents Stable Despite Vacancy Uptick​

• Street rates are falling, but its important to track existing costumer rents, which remain stable​

• Vacancy has risen in recent quarters – outlook will be dependent on economy and development pipeline​

• A wave of storage development is in the pipeline, but much of the new additions may be shelved while debt capital and construction costs are elevated​

Sources: Marcus & Millichap Research Services​

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