Transwestern briefing anticipates demand for commercial property
A U.S. Congress divided after the 2018 midterm elections is less likely to hinder continued economic growth or dampen demand for commercial real estate, Transwestern contends in its latest briefing.
Two years of anticipated gridlock ease fears that political or economic policy changes will derail business expansion plans, setting the stage for further job creation and modest gross domestic product (GDP) growth of about 2.0 percent in 2019.
“With surging corporate profits spurring continued job growth, we’re seeing healthy demand for nearly all types of commercial property,” Managing Research Director Mid-Atlantic Region Elizabeth Norton said. “Strong fundamentals point to attractive returns from real estate investments compared to stocks and bonds, as well as ongoing demand for both debt and equity.”
Most notably, the U.S. industrial market remains red-hot with record-high port volumes, positive absorption and a vacancy rate that remained below five percent in the third quarter, despite the addition of new inventory. Prelease commitments in the sector are offsetting a large percentage of the 376 million square feet of new construction. As employment is trending up in construction, manufacturing, transportation and warehousing, and a strong holiday shopping season, the robust demand is expected to continue.
While not as stellar as the industrial sector, the office market is enjoying stable vacancy and modest asking rent appreciation nationally. October’s 3.7 percent jobless rate signaled full employment by historical standards, but Transwestern expects recent retirees and others not counted as unemployed to re-enter the workforce in the coming year. Still, with dim prospects for increased immigration, a labor shortage could begin challenging economic growth by early 2020, the briefing states.
The full report is available at Transwestern's website.
Transwestern is a privately held real estate firm of collaborative entrepreneurs. Specializing in agency leasing, asset services, occupier solutions, capital markets and research, Their fully integrated global enterprise adds value for investors, owners and occupiers of all commercial property types. They leverage market insights and operational expertise from members of the Transwestern family of companies specializing in development, real estate investment management and research. Transwestern has 33 U.S. offices and assists clients from more than 219 offices in 37 countries through strategic alliances with France-based BNP Paribas Real Estate and Canada-based Devencore.
