Real estate industry leaders gathered Tuesday, February 4, at the Des Moines Golf and Country Club to hear the latest trends for the commercial real estate market. Associate Professor of Finance Tracy Turner moderated the panel discussion.
Sponsored by the Iowa chapter of Certified Commercial Investment Members (CCIM) and the Institute of Real Estate Management (IREM), the event was a who’s who of the Des Moines real-estate scene. CCIM President-Elect Mike Macri (MRED ’21) and IREM President Matt Guns co-hosted the event.
“It was an honor,” said Turner, director of the Master of Real Estate Development program. “The Annual Market Forecast provides essential insights for the Iowa real estate community. As the Midwest leader in graduate real estate education, we are pleased to be part of the discussion.”
The presentations began with Vice President at CBRE/Hubbell Commercial, Cy Fox, who specializes in acquisition and strategic repositioning of multi-family properties across the state of Iowa.
Fox explained that due to competition in primary and secondary markets, there is a lot of investor interest in tertiary markets like Des Moines leading to high demand for apartments and other multi-family dwellings.
“Multi-family will remain a favorite investment target for 2020,” Fox said. “Overall, though, it should be another great year for both market fundamentals and investment activity.”
Vice President at Cushman & Wakefield Iowa Commercial, Matt Lundberg, addressed the rumors surrounding the proposed Amazon fulfillment center in Bondurant. He estimates the campus will require a minimum of 2.6 million square feet in addition to the 110,000 already purchased.
He also asserted that Iowa is starting to hit the radar for out-of-state investors.
“Industrial space will be the most attractive space for investment and development in 2020,” Lundberg said. “For the first time in a while, supply has surpassed demand in central Iowa. It will be interesting to see how we respond as a market.”
Adam Kaduce, senior vice president at R&R Realty Group, spoke about the forecast for commercial office space.
Due to low unemployment, workers are in high demand. To entice new employees—and to convince established employees to stay—commercial office space is going to the next level by adding amenities.
“Employers are trying to entice employees by offering a unique office experience. We see a push toward fitness, food, coffee, and collaboration spaces,” Kaduce said. “Unique spaces provide an opportunity for employees to get away from their office for informal collaboration huddle-up meetings. Allowing employees to work from different environments is another tool that employers can use in the war for talent.”
Bill Wright, senior vice president at CBRE/Hubbell Commercial, examined retail real estate markets.
According to Wright, empty retail space is down from years past due to slowed construction of strip malls and the conversion of retail spaces to service-oriented businesses like gyms and restaurants. However, shopping malls are seeing an uptick in sales from Generation Z (those born between 1997 and 2010).
“The malls are beginning to benefit, as Gen Z is showing signs of preferring brick and mortar stores. They are seeking a seamless experience where purchases originated online can be picked up in the store,” Wright said.
While Wright asserts that retail sales will continue to slow, there will still be slow growth as store openings outpace store closings.
The Ivy College of Business is now accepting applications for the Master of Real Estate Development program. The MRED is the first in the Midwest and is designed for working professionals. Apply today.