treasury | Commercial Real Estate for Generation X, Y and Beyond

As we dove into 2015’s waters, investment capital stats were already at in influx. The US has traditionally been a favorite depository for said capital. With US Treasury Rates on a decline due to demand and the US Stock Exchange experiencing new elevations, commercial real estate is an attractive invitation for both foreign and domestic investors. The evidence of this is the growth of overall commercial property transactions in the US by foreign investors has now arrived at a level that we haven’t seen since 2006/2007. Firms aim a close eye at interest rates and market stability as they compare these current statistics with historical data. The timing for interest increases is concerning for most, and whether long term and short term rates will increase in a united or disjointed manner. A majority of soothsayers, (correction: forecasters), hold the belief that the Federal Reserve will raise rates Summer of 2015. Out of the estimated $5 trillion plus capital invested in the United States, over $3 trillion is debt-driven. Commercial real estate loans are steadily gaining as per the Feds, with private equities and REIT’s in the lead. There is speculation that we will see a “re-do” of 2006 where large sums will be reinvested into #cre in 2015 if all goes according to pattern. Is your brokerage positioned for these potential opportunities? Are you as an investor positioned to take advantage of this stimulative climate and seize the day?

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:

Alaska
Louisiana
North Dakota
Vermont
W Virginia
Wyoming

States that experienced no change:

DC
Iowa
Oregon
Virginia

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.