The 3 Trends Pushing CRE Toward Smart Building Enlightenment

Article originally posted on on January 15, 2019

The commercial real estate industry is disillusioned with smart buildings, and for good reason. Marketers of smart building tech have been forecasting a futuristic workplace that feels straight out of "The Jetsons". But so far, it hasn’t materialized.

Instead, CRE building owners have 1.5 billion internet-connected sensors and not enough to do with them. 

But this is all a misunderstanding — CRE professionals are unclear on what the “Internet of Things” is actually built to accomplish. IoT is a technology that is available now to help building owners reduce their costs and hold on to tenants by making them more comfortable. IoT isn’t a promise of space-age workspaces; it’s a clever investment that owners can make for the future.

Here are three trends that will transform IoT from a hyped-up technology to a shrewd investment in 2019:

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Slower GDP Growth Is Not A Negative For CRE

Article originally posted on Globe St. on January 14, 2019

Good and stable is better than fast growth, as it is sustainable for the longer term.

There was no way the torrid rate of growth in corporate earnings will continue this year. The effects of the tax cuts and deregulation had a huge impact for the positive in 2018, but now it is a new year with new problems. That said, for all the talk of a recession in 2019, the US economy is still growing very nicely and will continue to do so unless unforeseen circumstances interfere. It is likely that GDP will still post 2.5% to 3% growth, at least for the first half of 2019, and possibly into 2020.

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CRE Investors Are Showing a Growing Appetite for Higher-Yielding Alternative Assets

Article originally posted on National Real Estate Investor on January 14, 2019

Sectors such as self-storage and student housing appear more attractive as yields for core real estate drop.

It wasn’t that long ago that alternative properties didn’t get much respect, but as yields compress in core property sectors, alternatives have caught the eye of investors, and 2019 should continue that trend.

“For many years, non-traditional real estate was not fully appreciated,” says Tyler Blue, vice president of the advisory and consulting arm of research firm Green Street Advisors. But alternative sectors have outperformed expectations in recent years, and investors have noticed.

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Real estate funds have been a balm in a stinging market

Article originally posted on Phoenix Business Journal on January 14, 2019

After years of being overshadowed by the likes of Apple and Alphabet, real estate funds have lately edged ahead of the overall stock market by betting mainly on old-fashioned assets like office buildings, malls and warehouses.

In the fourth quarter, when the stock market really started to jitter and slide, the S&P 500 sank 13.52 percent, including dividends, but the FTSE Nareit All Equity REITs Index, a leading index composed of publicly traded real estate investment trusts, lost only 6.1 percent. For all of 2018, as the S&P 500 lost 4.4 percent, including dividends, the FTSE Nareit index lost only 4 percent.

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