Commercial real estate executives have remained optimistic about the potential of the U.S. market. However, commercial real estate investors, have kept in mind the realities of business in an expanding economy in this year's landscape.
Altus Group, in partnership with NAREIT and NCREIF, polled executives in charge of combined real estate assets under their management. They were asked to rate their 2016 outlook on a range of topics. Additionally, they selected a portfolio allocating budget to a variety of commercial real estate subsectors.
The commercial real estate survey found that the executives shared many worries with global business leaders, from terrorism to prices to the global markets' volatility, particularly in China. Many investors continue to focus on the United States for more opportunities and a stable market, including real estate, despite the economy's continued stop and go recovery, according to a report from MyAJC.
Nonetheless, the participants still believe in the reliability of the U.S. economy. Sentiments from investors reflected the wisdom that inflation is manageable and that interest increases have already been figured into predictions and the nation's gross is poised to continue growing modestly.
However, investors are less confident in the job market than most forecasters, who expect employment to grow at an accelerated rate. Many are skeptical about those numbers' feasibility when considering the potential for the U.S. dollar to affect exports and manufacturing employment, and for oil prices to impact energy-related jobs, as reported on Rew Online.
Overall growth has been evened out by an upward trend on wages, which had led respondents to forecast increases that would outpace inflation. With unemployment rate approaching the full-employment point and population growing too slow to absorb all the new jobs, the job market is tilting in favor of high labor costs.
The commercial real estate executives still believed, however, that investment opportunities still exist this year. But the majority surveyed are not expecting the same asset appreciation from last year.
