A year-end improvement in economic indicators gives rise to hope that sustainable economic expansion will finally take root. However, markets
remain wary of another shock caused by the unresolved sovereign debt crisis in Europe and political infighting in the build-up to the 2012 election.
US economic growth looks to be stronger heading into 2012, as some of the early-year headwinds – including high commodity prices and automotive supply chain disruptions – have dissipated. However, weak job and income growth, ongoing household deleveraging, and the tight fiscal posture of many state and local governments will likely keep the growth rate subpar through 2012.
Despite a noticeable slowdown in the US economy in 2Q11 and heightened uncertainty surrounding the debt ceiling, the US commercial real estate has moved firmly into the recovery phase of the cycle.
With the economy growing at a healthy pace, commercial real estate
fundamentals are finally moving in a positive direction in all sectors.
The lending environment has changed quickly, and while activity is far from pre-crisis levels, a new normal appears to be emerging.
Coming off one of the darkest cycles in the sector’s history, signs point to a period of surprisingly rapid recovery for commercial real estate.
Coming so close to the last capital-markets driven bubble, the speed at which the market is pumping up values is remarkable.
The commercial real estate market regained a little of its mojo in recent months, mostly connected to the capital markets.
The market can’t be fully healthy until the distress cycle is completed.
While we are encouraged to see signs of stabilization in the economy and financial markets, the outlook for commercial real estate will be dominated by three powerful themes: deleveraging, deflating asset values and deteriorating fundamentals.
The commercial real estate market is in the midst of a correction that is painful, to be sure, but it also is a necessary step to moving in the right direction.
Optimism is in short supply in the commercial real estate market.
After many years during which capital and space market forces have helped drive investment performance and attract a larger and more diverse investor base, the U.S. commercial real estate market faces serious challenges on both fronts.
The capital market environment has changed dramatically over the past six months and even since the year began.
Real estate investors face a much more challenging environment in 2008 than they have in many years.