California residents have probably heard about crowdfunding, a method of online activity that can be used to raise money for charitable causes or new product launches. Now, online crowdfunding platforms are being used to connect investors with real estate developers who need financing for new real estate projects. Investors can contribute funds to a project proposed on a real estate crowdfunding site and get a return on their investment later on.
In August 2016, research published by the Rosen Consulting Group, the Asia Society and other analysts revealed that Chinese investors had surpassed all other international players in the U.S. real estate market. Although a significant number of these investors spent their money on commercial deals that averaged around $1.5 billion in worth, businesses weren't the only big targets for investment. In 2015, for instance, Chinese nationals paid more than $800,000 on average to buy homes in urban centers across the country.
Commercial banks in California are much different today than they were in the 1950s. One of the most dramatic changes is the shrinking number of banks in the United States. There were 13,200 banks in 1955, and there are now only around 5,300 such institutions. After decades of inflation, the smaller number of banks that exist today control a lot more currency than the larger number of banks did in 1955.
Commercial real estate investors in California and across the country can expect lower returns in 2017 and 2018, according to a senior executive from the Pension Real Estate Association. The gloomy forecast reflects an uncertain market that will have to adapt to stricter lending regulations and volatile pricing in the year ahead. Tougher underwriting rules for highly volatile commercial properties have already gone into effect, and developers say that they are finding it increasingly difficult to secure the funds they need to get new projects off the ground.
Real estate investors in California are probably aware that prices for commercial real estate in most sectors have gone back up to their pre-recession levels. After the economic downturn in 2008 and 2009, there were many properties left vacant. Now that prices have recovered, home buyers and investors are coming back to formerly abandoned markets.
Augmented reality has put itself in the global spotlight thanks to the success of Pokémon Go. It is expected that augmented and virtual reality will become an $80 billion market by 2025, and it may be a technology that allows brick-and-mortar retailers to compete with online shopping. For instance, it may be possible to create customized window displays tailored to shoppers as they pass by stores.
The rise of e-commerce and online shopping has been hard on brick and mortar retailers, and many shopping mall operators in California and around the country have looked to restaurants to fill large retail spaces vacated by anchor tenants like department stores and big-box outlets. Americans spend more of their food budgets in restaurants than they do in grocery stores, but that spending has been slowing down of late. While restaurant spending was up by 6.25 percent in the first quarter of 2016, growth rates in both sales and foot traffic have been falling since mid-2014.