12 November 2014
Caroline Brooks |
He might reign as the current king of late night, serve as best pal to Justin Timberlake and be the one person who can
make President Obama “Slow Jam the News.”
We know Jimmy Fallon as a great many things, but you probably haven’t ever thought of him as a Market Outlooker, did you? Surprise, surprise.
In fact, a careful review of Mr. Fallon’s Instagram profile (@jimmyfallon) strikes a resemblance to findings in
JLL’s 2015 Cross Sector Outlook. For example, both focus their lenses on New York City’s market, which continues to gain the lion’s share of domestic and foreign capital across the majority of sectors. Both Fallon and the real estate markets harness the power of mobile devices, and both are seeking alternative investments in secondary markets.
New Jersey, New York, still got it.Industrial real estate opportunities look bullish in the Boss’ Badlands.
Cargo volumes at the Port of New York/New Jersey will continue to increase as shippers diversify their imports away from West Coast seaports; from 2007-2013 a combined Los Angeles/Long Beach had a 6.8 percent volume decline. Northern New Jersey’s industrial facilities will benefit from this trend.Northern New Jersey is home to the nation’s third busiest cargo complex, which posted a 33.4 percent gain in containerized volume from 2007 to 2013. This is appealing to infill developers who will add more than 2.0 million square feet within 10 miles of the seaport this year; 30.0 percent of which is currently preleased. Another 2.0 million square feet is expected to delivering the first half of 2015.
Northern New Jersey also offers access to the United States' largest trading partner, Canada. REITs and private equity firms will continue to account for a majority of the region’s transaction activity. Additionally, foreign capital will remain active: 13.0 percent of capital flowing into Northern New Jersey during the first half of the year, for instance, was from cross-border sources, vastly outpacing the U.S average of 8.0 percent.
On-hand mobile…for all occasions.Jimmy captured Harrison Ford’s ear piercing with his Apple product…retailers capture purchasing power the same way.
Mobile payment technology has been increasing in popularity over the past few years with scannable QR codes, near-field communication (NFC) and mobile wallet systems. However, with one of the biggest players in the mobile space–Apple–introducing NFC-enabled Apple Pay (not to mention its Apple Pay- enabled watch promised in early 2015), the mobile payment sector is about to get much hotter.
With the backing of the three major credit card companies and retailers such as Macy’s onboard, the mobile payment technology is really ready to impact the retail industry. It will require retailers to invest in checkout technology that can process mobile payments with ease, but the impact does not end there: think of cash-register free stores, checkout anywhere in the store and even bigger big data.
Feel at home in Secondary markets.Jimmy took his show to Orlando for a week…real estate investors seek office space in markets like this for the longer term.
While New York and other primary markets drove 66.3 percent of suburban transaction volumes over the past four quarters, the secondary suburbs edged out the primary markets for the first time post-recession, accounting for 54.0 percent of national suburban deal flow. Approximately 50.0 percent of this was driven by activity in the Atlanta, Orlando, New Jersey, Raleigh-Durham and Austin suburbs. Despite the slowdown in secondary activity in 2014 year-to-date, the expanding availability of product to acquire paired with the reported deepening of bidders across 75.0 percent of markets will drive the growth of secondary market activity.
New business, more travel.Fallon left the Saturday Night Live five years ago to begin a new career and travel to new cities. The same year, U.S. hotels began a solid growth trajectory. Coincidence?
Hotel demand is on a steady upward trajectory driven by business travelers, individual leisure travelers, group business and international arrivals. New hotel openings are at about half of the long-term average supply growth rate, leading to a recent acceleration in U.S. hotel occupancy growth.National hotel occupancy rates to near all-time highs, and aren’t showing signs of slowing. The U.S. lodging industry is in its fifth consecutive year of operating fundamentals growth with more runway ahead.
There’s no place like home.For Jimmy and his pal Gary, New York’s condo market has been a place to call home for years–now, other markets will follow.
New York City lured the majority of multifamily investment in 2014, accounting for 30.4 percent of all foreign capital into the domestic multifamily sector. Other markets are expected to follow: given oversupply concerns in select markets, developers across a broader scope of geographies will look to potential condo conversions as viable exits from projects, whether it be pre- or post-development. Depending on home buyer demand, this would additionally counterbalance supply concerns in select markets.An unlikely pair, Fallon and commercial real estate. Perhaps the industry should consider investing in front-row seats to The Tonight Show for its next wave of market predictions.
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