Commercial real estate experts are positive about the segment's growth in 2014, a new survey by DLA Piper - one of the leading multinational law firms - has found.
The report, titled "State of Market Survey", polled 158 top commercial real estate executives on their opinions and attitudes about the market segment and found that 89 percent of them were "bullish" about commercial real estate in the United States.
In 2011, only 30 percent of the people polled were optimistic about the market. This is a huge jump as compared to the current figures, especially at a time when e-commerce and e-tailing is so popular.
In the survey, 80 percent of the participants said they expect e-commerce and e-tailing to affect the commercial real estate market segment considerably. Most experts believed that "healthcare assets, such as hospitals, medical office buildings and assisted-living facilities", would attract more investors.
The reason that experts are bullish about commercial property is because credit availability is currently high for the segment. According to the Mortgage Banking Association, lending in CRE increased 19 percent on a year-over-year basis for the second quarter of 2014.
With easier lending, will rates surge? Apparently yes! The State of Market Survey saw 83 percent of the respondents saying interest rates will increase in the coming few months.
The respondents additionally attributed the growing confidence to the steadying American economy, which is drawing foreign investors in great numbers to the U.S. commercial market. Twenty four percent of the polled participants expect crowdfunding to become a major source of capital in the next five years.
LaSalle Investment Management, a real estate investment company, recently confirmed that it had received $1 billion worth of equity to invest in the U.S. commercial real estate market from an "unnamed large European institutional investor", according to Benzinga.com.
"We continue to see strong interest from sophisticated investors from around the globe in more customized strategies like this one targeting the U.S. commercial real estate market," Jason Kern, LaSalle Americas CEO, told the website.
Several décor trends like "open offices" are in high demand too, the survey found.
"While respondents to our survey gave serious credence to the emergence of the open office, it's important to note that this trend isn't exactly new. What is new is the powerful consensus that open floor plans are here to stay," Jay Epstien, chairman of DLA Piper's US Real Estate practice and co-chair of the firm's Global Real Estate practice, said in a statement.
"Our survey provides tremendous insight into where the real estate world is today and how its leaders view where they're going in the foreseeable future," he added