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Jacob Frydman, the chairman and CEO of Frydco Capital Group, thinks that to strengthen the office market of USA, we first need to build a robust economy. The expert in property investments also pointed to the sector’s continued improvement during the third quarter of 2018. During that period the absorption (a measurement of the net change of the supply of commercial space) reached 22.7 million square feet, vacancy remained stable at 10.1 percent, and average rent increased by 4.0 percent annually.In their latest industry report, commercial real estate (CRE) company Transwestern reported that year-to-date net absorption was 17.1 percent higher at the end of the third quarter than it was for the same period last year, indicating that demand is exceeding supply and the sector will continue to grow. The major markets of Dallas-Fort Worth, San Francisco and Denver have led this category by a significant margin over the past 12 months, with a combined positive net of 13.3 million square feet. “It’s encouraging to see that office demand is broad-based across multiple sectors, with technology and coworking spaces the driving factors as we move later into the cycle,” said Jacob Frydman, who acquired, and currently owns, 500 Tenth Avenue in Manhattan, which he successfully redeveloped into the DHL Center. “If demand continues to increase unabated, rental rate growth should maintain its encouraging pace.” In comparison with 2017, Minneapolis, San Antonio and Charlotte, North Carolina have experienced the most dramatic market changes, with average rent prices increasing by more than 10 percent. The impressive performance of these cities, considered secondary markets, demonstrates that the office sector is not being supported solely by the nation’s largest metros and is performing strongly across the board.
Jacob Frydman pointed to the recent track record of the U.S. economy as a primary factor behind the current surge of CRE action, stating that it has led to jobs being created at a faster pace. Through the first three quarters of 2018, real gross domestic product increased at an annualized 3.5 percent, according to first estimates, and personal consumption also contributed 2.7 percent to that rate. This has been reflected by office using employment increasing by 1.7 percent on an annualized basis as companies acquire more space to house employees. Considering that inflation has also remained in line with the Federal Reserve’s target of 2.0 percent, Frydman is confident that consumer and business confidence should keep the office market healthy well into 2019.
Jacob Frydman is the Chairman and CEO of Frydco Capital Group, a private family office, through which he invests in real estate and private equity opportunities. He has more than 30 years of experience in structuring, financing, and executing highly complex real estate transactions, having acquired over five million square feet of existing and to-be-developed real estate located throughout the US and has participated in transactions valued at over $2 billion over the course of his career. Jacob Frydman’s notable acquisitions include the Two Dag Hammarskjold Plaza, the Aetna Building in Manhattan’s Financial District, the unfinished Global Crossing New York headquarters, and the NBC New York television studios.
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Jacob Frydman -- Huffington Post: http://www.huffingtonpost.com/author/jacob-frydman
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