Dec 27, 2023 - 0 Comments - Economy, Trends, Videos -

Video: KC Conway of KCnomics Discusses 2024 Economic & Real Estate Outlook

Economist K.C. Conway with KCnomics, LLC shares his outlook for various commercial real estate sectors, banks, interest rates, and the economy overall. Discussions include forecasts for office, retail, industrial, multifamily, build-to-rent, senior housing, and self-storage property.

The Discussion

As the real estate landscape continues to evolve, professionals are exploring new opportunities and addressing challenges in various sectors. Two recent conversations shed light on key insights into the market dynamics, covering topics from secondary markets to the impact of remote work on office spaces.

1. Commercial Real Estate Opportunities in Secondary and Tertiary Markets:
The first conversation delves into the potential opportunities in secondary and tertiary markets, emphasizing locations like Huntsville, Alabama, and Columbia, South Carolina. The speaker highlights the growth fundamentals, robust manufacturing, supply chain shifts, and affordable workforce and housing. Secondary markets, such as Wichita, Kansas, and Little Rock, Arkansas, are also discussed as attracting attention from industries, showcasing the potential for economic growth beyond traditional hubs.

2. Multifamily and Industrial Property Sectors:
The conversation expands to discuss the multifamily and industrial sectors. Despite concerns about a potential implosion in multifamily, the speaker remains optimistic, attributing the sector’s stability to government intervention, low vacancy rates, and property management efficiency. In contrast, the industrial sector is undergoing shifts, with a focus on smaller, well-located buildings to accommodate changing tenant preferences.

3. Retail and Unique Retailers:
The retail sector is examined, with a focus on services and grocery stores. The speaker suggests that grocery-related businesses are thriving, and unique retailers like Tractor Supply, known for their presence in secondary and tertiary markets, are positioned as strong players in the retail landscape.

4. Concerns in Self-Storage and Opportunities in Manufactured Housing:
The conversation takes a turn towards self-storage, expressing worries about an overbuild cycle. On the other hand, the speaker expresses enthusiasm for manufactured housing as an affordable option, citing challenges related to misconceptions and nimbyism.

5. Build-for-Rent Subdivisions and Senior Housing Challenges:
Build-for-rent subdivisions are discussed as a concept facing challenges due to aggressive land pricing and financing issues. Senior housing is explored, acknowledging the potential for adaptive reuse of facilities but also highlighting rising costs and financing challenges.

6. Office Property Sector Uncertainty:
The second conversation addresses the elephant in the room – the office sector. Remote work’s impact on office values is compared to the transformative effect e-commerce had on big box retail. Suburban office markets are viewed as strong, while urban markets face challenges with commuting concerns, crime issues, and changing service dynamics.

7. Insights for 2024:
KC Conway closes with insights for 2024, emphasizing the need to reevaluate traditional market metrics. With potential headwinds from elections, geopolitical issues, and a volatile market, professionals are advised to tune up their skills, network, and seek guidance from experienced industry peers.

The commercial real estate industry in 2024 presents a landscape of opportunities and challenges, from secondary markets and evolving sectors to uncertainties in traditional office spaces. Navigating this dynamic environment requires a proactive approach, adaptability, and a keen understanding of market shifts.