Three well-known commercial real estate industry groups and local experts believe the industry will recover dramatically in the second half of this year and after 2022, according to new research conducted by each.
According to a new survey of members by the Society of Industrial and Office Realtors (SIOR), 74% of all commercial real estate transactions are on schedule, more than double the percentage in the second quarter of 2020. ..
NAIOP, which consists of office and industrial developers, has been actively absorbing office space nationwide (defined as more leased space than available space) in the last three months of this year. I expect to come back. Since the COVID-19 pandemic, office leasing has been hit hard as many tenants have abandoned their offices or vacated quarters for subleasing.
Meanwhile, the Urban Land Institute (ULI) expects US commercial real estate trading volume to exceed $ 500 billion this year, more than $ 100 billion higher than historical averages and last October’s forecast.
Each of the three groups attributed the expected improvement to higher vaccination rates and impacts on the economy as a whole.
“As vaccinations increase and the economy opens, demand is high and trading is progressing at a rate not seen before the pandemic,” said SIOR. “Leasing activity is at pre-pandemic levels. It surpassed and development exceeded the conditions reported a year ago. “
“Macroeconomic data are positive and the mitigation of pandemics through vaccination and other measures has had a significant impact,” said Thomas Bisacquino, chairman and CEO of NAIOP, in a statement.
The positive forecasts of industry groups follow the equally enthusiastic outlook of major commercial real estate brokers CBRE Group, JLL, Marcus & Millichap, Koreas, Cushman & Wakefield and Newmark. I was struck.
From the Gulf to central Florida, brokerage leaders agree that the rest of the business in 2021 should be strong.
“Of course, depending on the type of asset, I think the activity level, the number of calls and inquiries we receive, the number of tours we take, is busier or busier than before the pandemic. “I will,” says Danny. Rice, who heads the operations of commercial real estate agency Collier in central and southwestern Florida.
“This is not a closed deal, but from everything we see, we expect things to recover significantly in the second half of this year.”
“I’m bullish across Tampa and the central Florida region,” says Tim Rivers, Florida’s market leader for commercial real estate agency JLL.
“Florida as a whole has done a great job of creating an environment suitable for live workplay, so people want to be here.”
All three industry groups cite projected gross domestic product (GDP) growth rates for this year and next year, along with federal stimulus, as the main reasons for the forecast.
ULI forecasts GDP growth of 6.5% this year. This is the highest growth rate since 1984. NAIOP is even more bullish. We expect GDP growth to reach 7.7% over the next two years as the unemployment rate declines.
All three groups agree that industrial real estate continues to outperform and multi-family leasing projects are delayed.
With the return of the company to the office, the office space will also be restored. NAIOP expects US quarterly office absorption to average 11.7 million square feet in 2022, similar to the 2015-2019 level.
According to a SIOR survey, member leasing activity, primarily in office and industrial projects, has nearly doubled in the last two quarters. More than 60% of member respondents say they are leasing, but only 36% in the group’s previous survey.
ULI’s analysis is even more enthusiastic. Based on the views of more than 80 economists and real estate analysts, the group said this year’s trading volume would exceed $ 500 billion, a long-term average of $ 347 billion in the United States and about $ 427 billion completed in 2020. I’m expecting it.
Next year, ULI expects to close $ 550 billion, which will increase to about $ 590 billion in 2023.
Many respondents say they continue to be concerned about uncertainties and rising construction costs, but timber and concrete costs have risen dramatically over the past year. Feelings are overwhelmingly positive regarding leasing, development and other activities.
“Sure, we’re still in the wait-and-see summer, but the level of activity so far from the pandemic is more positive than I expected at this point, and we expect it to continue well. 2022 “, Says Korea’s Rice.
Rising Commercial Real Estate Industry Optimism | Business Observer
Source link Rising Commercial Real Estate Industry Optimism | Business Observer