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TD Bank’s Gregg Gerken on What’s Driving CRE into 2018
By Dennis Kaiser
Connect Media asked TD Bank’s Gregg Gerken, head of the commercial real estate unit, to share his insights on the hottest markets, the demand drivers and what he sees ahead in 2018. Here’s his responses in our latest 3 CRE Q&A.
Q: How are Millennials impacting the commercial real estate market and what trends are you seeing in their location and amenity choices?
A: There continues to be an opportunity for investors in the multifamily market. Millennials continue to seek amenity-based housing that’s within close proximity to stores, transportation and restaurants. As this trend continues among millennials, it creates an opportunity for developers. Consumer-buying behaviors also have significant influence on retail industrial properties. The need for immediacy and convenience is driving demand for additional distribution centers across the country. A majority of retailers and e-commerce sites are adapting to these shifting demands.
Q: How are amenity-based living trends impacting office space property types? Is there more of a demand in urban vs. suburban areas and what trends are you seeing in the development of these spaces?
A: With job growth increasing for most of 2017, office real estate space constitutes an expanding market for investment. In urban areas, we’re finding that employees want to work in close proximity to their homes. They want to be near major transit areas to limit long commutes. In suburban areas, there is a greater demand for office space near entertainment venues and other amenities. These office buildings are relying on smaller, flexible workspaces. Co-working spaces also have become more common as professionals choose alternative working methods. We anticipate that new more efficient office projects will be constructed, and many existing office buildings will be re-purposed if they are no longer financially viable.
Q: The CRE market is experiencing exponential growth and expansion in some markets. Are there particular areas that are especially booming? Why are they attractive to developers and the people who are buying, living and working in these properties?
A: The Southeast and Southwest regions of the U.S. are particularly experiencing strong population and job growth, so we anticipate that these markets will see an increase in CRE deal volume in 2018. Multifamily housing will be popular in this region, given the population boom. We also anticipate that this will lead to more affordable housing options. As more companies are migrating to the Southeast, we’ll also continue to see interest in industrial and office properties.
For comments, questions or concerns, please contact Dennis Kaiser
