Source: bizjournals.com ~ Author: Ben van der Meer
It has been an encouraging year for real estate. With retail centers getting new owners, industrial developers building on spec and multifamily properties being snapped up, sectors are visibly recovering.
Consider the following examples:
Downtown Sacramento— It’s a big “if,” but if every new proposal for downtown Sacramento gets built, the skyline will be notably different in another five years.Downtown Plaza Tower would be the focus of a new entertainment district. And of course the new arena across the plaza will draw attention for years to come. To the south, Sacramento Commons would boost downtown residential development, while across J Street from the arena and tower,Vanir Tower would be the shiniest office space on the block. Add in new talk about the Metropolitan coming back to life, redevelopment immediately around the arena and big names like Kaiser Permanente and Buzz Oates Group of Cos. making downtown plays, and there’s suddenly a lot happening.
Speculative construction: Vanir Tower is an example of this on the office side, but it’s still years away. Other spec projects, though, are getting active now, including the Stone Point office complex in Roseville and Ridge Capital’s industrial project in West Sacramento. Any kind of building on spec is a bet on the future, and after the Great Recession and the numerous busted commercial projects it caused, building on spec is seen as riskier than it was a decade ago. But if it pencils out, investors are starting to dive back in.
Housing finds its place: Compared to 2013, housing had a tougher year. Single-family home sales fluctuated between encouraging and disappointing. But new-home sales began to show strength later in the year. Homes near the urban core of Sacramento sold without difficulty. And multifamily, whether measured by occupancy rates or sales price, was on fire everywhere from midtown to Roseville. All this suggests housing that’s scratching the right itch in the market isn’t going to have any problems, and more builders can get a piece of the action as the economic recovery continues.
The positive news is that nearly every forecast for next year suggests progress. And when there’s good news in a number of different areas and sectors over the course of a whole year, it suggests underlying and lasting strength in the years ahead.