MIAMI—David Lynn, CEO and co-founder of Everest High Income Property, sees plenty of momentum across the commercial real estate board in 2015. Of course, Lynn would see it, given he specializes in just about ever asset class.
We've been picking Lynn's brain about cap rates. He told us in part one of this interview that cap rates may go lower in 2015 and that we still have room for growth in the market.
Lynn also gave us the skinny on investor interest in class B, class C, secondary and tertiary markets. In part two of this interview he told us lenders will continue to become more comfortable with real estate.
In part three, we're drilling down even further. Be sure to come back to GlobeSt.com this afternoon for the final installment, in which Lynn will discuss the challenges and fears he sees in the market and offer advice for real estate investors
GlobeSt.com: What sectors—multifamily, industrial, retail, hotel, office, net lease—do you see as gaining momentum with investors in 2015? What will drive that momentum?
Lynn: Multifamily will continue to be strong, particularly in urban markets due to demand driven by the Millennials, as they form new households. Industrial will continue to improve based on firm economic activity—as will retail.
Office will gain momentum along with general business health. People need to be around other people—and like to be—so work environments will continue to thrive in physical locations where ideas and cooperation foster business growth. The future of office is not all remote on personal electronic devices.
Occupancy of urban hotels is near an all-time high, and hotels are becoming more efficient in operation, which is a big driver of their profitability. Much of the nation has gone more hotel-upscale, and newer properties are in demand, so the older properties may not do as well.
But considering that with cheaper gasoline more people are traveling, even older motels along highways will probably have increases in occupancy. Expect more vacation travel by car with lowered gasoline rates.
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