NAR’s latest Commercial Real Estate Outlook offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets.
Highlights:
- Commercial real estate in SCRE markets continued to experience advances in investment sales, as the momentum picked up in the final quarter of the year.
- The bifurcation in investment trends continued along valuation lines. However, even in LCRE markets, trends proved more nuanced.
- Commercial leasing fundamentals remain poised for expansion this year, boosted by an expanding economy, employment and the tax reform.
- Vacancy rates are projected to continue their decline, except for multifamily properties, where rising new supply is putting downward pressure on rents.
Economic Overview:
Economic growth strengthened to 2.3 percent in2017, from 1.6 percent in 2016. After a slow start in the first quarter, the economy picked up steam in the second quarter and finished strongly in the fourth quarter, with all engines of the economy firing. Private consumption, private investment, exports, and government spending all expanded at a stronger pace compared to the expansion in the third quarter and the same period one year ago.