Well it is that time again when the economists, financiers, commercial real estate execs and genies make their predictions for the New Year. As predicted by the Delloitte Center for Financial Services, rents and vacancies showed improvement, development pressed pause, REIT’s and foreign investment led the charge in activity, the standards for CRE lending were allayed and leasing was partially determined by tenant’s use of technology. The majority of sources remain positive regarding 2015’s outcome.
We have good news on the unemployment sector. The majority of the US saw a downturn in unemployment. That evidence includes those that vacated the workforce. For 2014, here are the stats:
States where unemployment experienced an annual increase:
- North Dakota
- W Virginia
States that experienced no change:
While Puerto Rico’s unemployment decreased, they still hold the highest unemployment rate at 14 percent. The average in the nation in December was 5.69 according to NCSL data.
The prevailing inclinations as we gaze “through the looking glass” are:
- Enduring returns of REIT’s
- Expanded funding sources on a global scale
- GDP growth trend
- Investment transactions rise
- Construction Industry gradual recovery
- Technology advances
- Industrial property development growth
- Suburban markets making a comeback
The potential perils and pitfalls foreseen in wonderland, pardon me, CRE-land include currently delayed, yet inevitable Treasury rate escalations, federal regulatory ambivalence, the predicted plunge in US labor force growth two years from now, aging infrastructure and vacillating energy prices.
In Through the Looking Glass (Part 2) we will further explore the nuts and bolts of the industry findings…stay tuned.
Deloitte Center for Financial Services, Deloitte Development LLC, 2014 “2015 Commercial Real Estate Outlook”
Urban Land Institute & PWC, “Emerging Trends in Real Estate – US and Canada 2015”
National Conference of State Legislatures, http://www.ncsl.org/research/labor-and-employment/2014-state-unemployment-rates.aspx, December 19, 2014