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The Mortgage Bankers Association Research group released a report highlighting market trends in relation to the commercial/multi-family real estate industry.  The data outlines the challenges and opportunities in the commercial market, both past and present.  2017 was a record setting year for commercial real estate finance with $530 billion in loans backed by commercial and multifamily properties.  In turn mortgage delinquency rates were at record lows.  2018 has carried that momentum, however, headwinds and tailwinds are projected to impact the remainder of the year.

Headwinds

  • Rising Interest Rates
  • Slowing Net Operating Income Growth
  • Slowing Property Value Growth
  • Slowing Property Sales

Tailwinds

  • Growing Economy
  • Tax Reform
  • Ample Investment Capital

The factors seem to be evenly matched and trends from the recession are sure to impact the future.  These developments have and will affect various commercial real estate types of properties in a different way. The multifamily properties have continued to rise, with more units under construction than anytime since 1970.  Office rates have been somewhat unaffected, despite increase in workers, due to lower space requirements for employees.  Industrial properties have taken the interest that was retail investments (because ecommerce has slowed down the demand for retail properties).  Industrial vacancies have declined, rents increased, and rate of growth steadily increased.  Industrial property sales increased by 25% between 2016 and 2017-the only major property type for which sales volume increased.  In addition, industrial property values increased by 8.6%, making it attractive for investors.

Dart Appraisal offers Commercial Real Estate Appraisals.  Our commercial review team members are all Certified General Real Property Appraisers. They conduct technical reviews and/or desk reviews, request any necessary revisions from the appraiser, and handle questions from both appraisers and clients. They are also available to assist Dart's operations associates in crafting bid language for commercial assignments.

Due to acquiring Value Management Group, the commercial review team brings a wealth of knowledge and experience to the table. The team's combined appraisal experience includes a wide variety of commercial property appraisals performed for lending institutions, attorneys, accountants, individuals, and governmental authorities. The average appraisal experience of the commercial review team is 23+ years. Collectively, the team holds 36 state Certified General Real Property Appraiser licenses.

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