Based on the Expectations & Market Realities in Real Estate 2015: Scaling New Heights report released by Situs, RERC, Deloitte and the National Association of REALTORS® commercial real estate (CRE) has been riding a wave of improved macroeconomic conditions and bullish capital markets. During 2014, gross domestic product rose, employment growth accelerated toward the latter part of the year, and stock market indices reached new heights. Consumer confidence improved as the year progressed and oil prices sharply declined, offering strong wind in the sails of economic activity. As the Federal Reserve concluded its quantitative easing program, its target funds rate remained unchanged, as inflation continued below its target range of 2 percent.
Highlights
- Commercial vacancy rates declined for the core property types. Availability is expected to continue contracting for office, industrial and retail properties in 2015 and beyond.
- Vacancies for apartments are estimated to rise, due to gains in supply.
- Commercial rents have risen across the board, and are projected to advance this year to the tune of 2.5 percent to 3.7 percent.
- Lending conditions in REALTOR® markets notched another year of sustainable recovery.
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