DENVER—Office recovery nationwide has reached markets that had been lagging post-recession, and even class-B and suburban markets are brightening due to tightening vacancies in core markets, says John Maurer, managing principal and head of investment strategy for EverWest Real Estate Partners, a full-service private real estate investment manager and operator here. EverWest was formerly Alliance Commercial Partners, and Maurer was recently added to the firm's executive leadership along with Gary Picone, who will anchor the firm's New York metro office as well as a four-person investment team. GlobeSt.com chatted with Maurer about EverWest's formation, private real estate investment strategies and trends in the various commercial real estate sectors.

GlobeSt.com: Tell us about the formation of your company.

Maurer: The rebranding of the company to become EverWest was the next logical step in the growth of our investing platform. During the last several years, our platform has grown to be a full-service private real estate investment manager and operator with acquisition, asset-management, property-management, financing, risk-management and reporting capabilities. One of our advantages is that the leadership team has a long history of working together and investing side by side with our clients, creating alignment in everything we do. This same leadership team has been very disciplined in maintaining a collaborative and interactive company culture, which is reflected in our ability to attract and retain talented investment professionals, and echoed through our investment track record.

The addition of Gary Picone and me to the leadership team only added to the already deep talent base the company possesses. The company is privately held and owned by the senior principals of the firm, and the senior principals are involved in most every facet of the investment process, which our clients appreciate. We employ 47 professionals in seven offices throughout the US, which gives us broad investment capabilities and currently allows us to identify investment opportunities in the more-attractive real estate markets in the country.

GlobeSt.com: What are come current strategies you are using for private real estate investment and asset management?

Maurer: The size and depth of our investment team allows us to be active in several property sectors. My partners and I have a long history of success in industrial and office investments. We continue this tradition by investing in both property types on a core and value-add basis.

The core strategies generate consistent income returns for our investors, while the value-add investments take some measure of leasing risk, lease rollover, renovation or redevelopment risk in exchange for the potential of capital gain over time. EverWest has acquired over $97 million in industrial assets over the last 18 months, and we continue to source attractive return-potential industrial investments. We view office investments with increasing interest as the nation's employment growth slowly improves. By the end of third-quarter 2014, the company will have closed nearly $93 million of core and value-add office investments.

Another strategy we pursue is build-to-core opportunities with respect to select apartment developments. The company currently has $110 million under construction or recently completed and expects to continue this approach in select markets across the country.

Structured finance is also viewed favorably, and in that regard we have recently established a structured-finance group that originates mezzanine debt loans and preferred-equity investments across all property types.

GlobeSt.com: What other commercial real estate trends are you noticing?

Maurer: In the industrial sector, while we continue to view the Western and Midwestern distribution markets quite favorably, many space users and investors are targeting Eastern seaports and secondary markets that are within one-day travel times of seaports due to the imminent Panama Canal expansion by the end of 2015. We see demand picking up in the Eastern US based on the canal expansion. e also see a trend for some manufacturing to be repatriated back to the US from across the Pacific Ocean (particularly in China) due to rising labor costs. We believe the US industrial market should benefit from growing space demands. As most already known, demand for e-commerce facilities continues to expand; markets near UPS and FedEx hubs are most likely to attract major distribution centers to service the increasing demand generated by e-commerce sales.

The apartment market is firmly into the expansion phase of its cycle, with vacancy rates in most markets at or below historical averages and effective rents reaching record levels. The Millennial cohort remains the primary target renter pool; they desire flexibility and will sacrifice living space in exchange for being in prime urban infill locations with luxury amenities. The aging of the Baby-Boomer generation will increase the number of renters over age 65 by two million through 2023, generating nearly half of all overall rental growth. We also see that prices and cap rates of gateway class-A assets have generally hit a floor, with some heightened concern about increasing interest rates over time as the economy continues to improve. Assets located in secondary markets with strong employment growth, particularly in the Southeast, will remain in high demand as the investor search for better yields becomes more difficult in today's market.

The US office sector continues its recovery, as Q2 2014 witnessed the highest rate of net absorption (13.9 million square feet) during the recovery and had over 46 million square feet of net absorption over the last four quarters. Many of the markets that were laggards during the recovery, such as Atlanta, Chicago, Philadelphia and Phoenix, are making up for lost time. We also see opportunities ahead for some momentum n class-B and suburban markets due to increasing tightness for quality space in gateway markets. Office development is also making a comeback, with more 65 million square feet under construction, particularly in Texas and Northern California.