Dividend Capital’s Q4 2016 Commercial Real Estate Cycles Report

Once again one of my favorite quarterly blogs – writing on Dr. Glenn Mueller’s Real Estate Cycles from Dividend Capital. Such a mass density of valuable data in so little space. Powerful.

Dr. Mueller’s analysis covers 55 of the major commercial real estate markets in the U.S. This is the one report that shows how property types are performing today in a supply and demand framework.

I often receive requests for the summary of Dr. Glenn Mueller’s quarterly report on commercial real estate cycles well in advance of the quarter end. That’s how valuable it is. The Cycle Monitor – Real Estate Market Cycles from Dividend Capital is an excellent resource for checking the pulse rate and blood pressure across commercial real estate markets.

Dr. Mueller is a professor for the Burns School of Real Estate and Construction Management at Denver University. He is also the real estate investment strategist at Dividend Capital Group, where he provides real estate market-cycle research and investment strategy for Dividend Capital’s Real Estate Securities. In my opinion, Dr. Mueller is the premier recognized expert in the study of commercial real estate cycles in the U.S.

Dr. Mueller defines four distinct phases in the commercial real estate cycle. These cycles provide intervals for investment and exit strategies for real estate investors.

  • Recovery (declining vacancy, no new construction)
  • Expansion (declining vacancy, new construction)
  • Hypersupply (increasing vacancy, new construction)
  • Recession (increasing vacancy, more completions)

The following table summarizes the latest findings for each of the property types in the study. Occupancy rates increased slightly in all property segments except apartments. Industrial continues to be hot with rents up 6.7 percent in 2016. Retail and hotels had a zero rental rate change in Q4 2016, apartments dropped 0.6 percent – (over building in many markets), offices rose 0.7 percent and industrial was up 1.7 percent.

2-28-17a table

To download the latest full report of Dr. Glenn Mueller’s Dividend Capital Real Estate Cycles Report click http://mediacenter.merrillcorp.com/interface/viewer.asp?LocationID=7039099&ClientID=35&Purpose=HUMAN_VIEW&Caller=RETRIEVE_FILE

Pay attention to each of the property types in the report focusing on cities that have excess supply, and also those with supply trailing demand.

To obtain reports from prior quarters email: dividend.capital@dividendcapital.com

Dividend Capital has several Real Estate Investment Trusts (REITS) and specializes in real estate investments. To learn more about Dividend Capital click http://www.dividendcapital.com

Finally, to find out more about Dr. Glenn Mueller click http://daniels.du.edu/faculty-staff/glenn-mueller/

If you are involved any way in commercial real estate in the major markets across the country, this is a must-read report. Kudos to Dr. Mueller and Dividend Capital.


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