John Falco, a principal located in Kingsley Associates’ Atlanta office, was recently invited to speak at the 2015 UNC Real Estate Conference, organized by UNC’s Kenan-Flagler Business School. This annual event brings industry leaders together for a lively discussion of current real estate trends, and this year’s was the most attended since the conference began in 2012.
John’s presentation coupled highlights from two jointly developed research initiatives along with proprietary data from the Kingsley Index database.
Institutional investor insights were derived from Kingsley Associates and IREI’s annual Global Investor Survey, focusing on the outlook of the largest domestic tax-exempt investors in real estate. The survey examines investors’ real estate capital flows, risk and return expectations, planned search activity for investment managers, and investment enthusiasm.
- Projection: $46B in new 2015 capital flows from US investors
- Return expectations decline across most asset classes
- Industrial assets most attractive for new investments
- Investors increase targets to core, value-added, and foreign real estate
John presented tenant and resident data from Kingsley Associates’ proprietary performance benchmarking database, known as the Kingsley IndexSM. The Kingsley Index includes strategic data collected annually from over 3 million residents and commercial tenants occupying more than 2 billion square feet of office, industrial, medical office, and retail space.
Kingsley Index highlights:
- Tenant renewal intentions highest among medical office buildings (69% likely to renew their lease)
- Satisfaction with Value for Amount Paid continues to grow among office tenants (up to 70% versus 61% in 2010)
- Industrial tenants most likely to need more space (21% versus 12% in retail)
Property management trends were highlighted from Kingsley Associates’ partnership with BOMA International to produce the Experience Exchange Report (EER). The EER is commercial real estate’s most trusted and comprehensive income and expense benchmarking resource. The report covers more than 5,700 office buildings and 1 billion square feet of space across the U.S. and Canada.
BOMA EER highlights:
- Rental income is up 7.2% over the past year (from $25.53 psf to $27.38 psf)
- Operating expenses up 5.3% (from $25.53 psf to $27.38 psf)
- Space utilization is up as the space per worker has gone down 4.5% (from 317.7 sf to 303.4 sf per worker)
To view a PDF of John’s presentation at the conference, click here.