Commercial Real Estate Executives Comment on Market Cycle, Expect Asset Values to Stabilize
A growing number of commercial real estate executives participating in The Real Estate Roundtable's latest quarterly "Sentiment Index" expect market conditions and prices to continue to stabilize over the next 12 to 24 months.
"Our Q2 2015 Sentiment Index shows that industry leaders acknowledge a significant recovery in markets throughout the country. How much of an upside is left in the current cycle is a reasonable question in an environment of very strong valuations, low interest rates and steady demand. When markets eventually stabilize from this growth curve, we hope national policies will be in place that will spur greater job creation and continue to foster an appropriate flow of investment into the real estate capital markets," said Roundtable CEO and President Jeffrey D. DeBoer.
The Q2 2015 Overall Index registered at 62 on a scale of 1-100. Comparing today's market to one year ago, 90 percent of respondents reported that conditions are either "somewhat better" or "about the same." When asked to forecast conditions one year from now, 85 percent responded that markets will be "somewhat better" or "about the same." Comparing real estate asset values today versus one year ago, 82 percent of survey participants reported prices are "somewhat higher" – but when asked to predict values one year from now, 41 percent said they will be "somewhat higher" while 44 percent responded "about the same."
"To encourage long-term investment in U.S. commercial real estate markets and infrastructure projects that create jobs, The Roundtable supports legislation recently reintroduced in the House that would reform the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). Another common-sense policy step to attract foreign investment in job-creating projects would be to reauthorize the EB-5 "immigrant investor" program that is scheduled to expire in September," added DeBoer.
Data for the Q2 survey was gathered in April by Chicago-based FPL Associates on The Roundtable's behalf.
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