Commercial Real Estate to Grow 'Moderately' Through 2019

Commercial Real Estate to Grow 'Moderately' Through 2019

RECBL - Real Estate News

A recent forecast out of the Urban Land Institutes (ULI) Center for Capital Markets and Real Estate predicts moderate growth for the commercial real estate industry through 2019.

The ULI Real Estate Economic Forecast, a semi-annual projection based on survey responses, anticipates commercial real estate will see $450 billion in transaction volume in 2017 and $427 billion in volume in 2018 and 2019.

All are declines from the previous year. On the broader economy, the forecast expects GDP to grow 2.2 percent in 2017 and 2.4 percent in 2018.

"Respondents to the October 2017 ULI Real Estate Economic Forecast downplayed the possibility of a spike in economic growth through 2019," said William Maher, director of North American Strategy and Research at LaSalle Investment Management, leader at ULI and a survey respondent. "At the same time, they confirmed that the current expansion could become the longest one since records were kept starting in the 19th century.

While real estate will benefit from continued growth, U.S. property markets are close to equilibrium, which should result in inflationary rent growth and returns in the single digits for core real estate and equity real estate investment trusts (REITs)."

The forecast expects 960,000 single-family housing starts in 2019, and home prices to appreciate an average 4.8 percent through 2019.

Source: Urban Land Institute (ULI)

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