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Moderate Expansion, Easing Prices Expected for CRE in 2016

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For the past five years, NAR has collaborated with Deloitte and Situs RERC to release an annual commercial real estate outlook forecast. The 2016 edition, titled Expectations & Market Realities in Real Estate 2016—Navigating through the Crosscurrents, was hot off the presses this morning.

Given the various global and domestic headwinds likely to keep economic growth around 2 percent for another year, what should commercial real estate investors and connoisseurs expect in 2016?

According to the experts, commercial property values and price gains are expected to flatten after surpassing 2007 peaks in some major markets. However, investors will still benefit from the strong income flows generated from new and existing leases.

While vacancy rates are expected to slightly rise as new projects complete, the shining star in commercial this year will yet again be the apartment sector. The demand for renting remains strong, and young adults graduating from college or moving out of their parents’ basement are likely to rent before buying a home.

Interested in what else is in the report? This afternoon at 2:00 p.m. ET, Deloitte will be hosting a live webcast. NAR’s commercial economist, George Ratiu, is participating, and will offer his thoughts on current macroeconomic conditions, capital market trends and the overall outlook for 2016. For more information and to register, please visit the Deloitte Dbrief page.