Despite challenges, commercial real estate executives remain optimistic about economic growth
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Despite challenges, commercial real estate executives remain optimistic about economic growth.
Their sentiment is revealed in the Real Estate Roundtable’s latest index which increased by 3 points to 53 in the fourth quarter of 2017 compared to the previous quarter.
"Recent tax reform efforts in Congress are significant steps toward tax reform, yet a final bill that may eventually emerge from a bicameral conference must encourage capital formation and help maintain the strength of our capital markets," said Roundtable President and CEO Jeffrey DeBoer. "As our Q4 Index shows, 2017 was a positive and productive year for our industry. Asset values are high, and debt and equity capital remain widely available.”
Most executives polled said that they do not see material change for the commercial real estate market in the near term, although greater clarity on tax reforms is sought.
Many respondents cite difficulty sourcing new equity commitments from limited partners. While this has always been perceived as a challenging undertaking, the market's wariness of cycle timing is exacerbating the difficulty.
More than a third of respondents said that asset prices were up from a year ago but 54% said that expect them to hold steady over the coming year.
DeBoer added "The commercial real estate industry is a positive contributor to America's economy. As Congress continues to work toward comprehensive tax reform that supports healthy and balanced real estate markets, the commercial real estate industry should be well-positioned to put more people to work as business investment accelerates and the broader economy improves."
Their sentiment is revealed in the Real Estate Roundtable’s latest index which increased by 3 points to 53 in the fourth quarter of 2017 compared to the previous quarter.
"Recent tax reform efforts in Congress are significant steps toward tax reform, yet a final bill that may eventually emerge from a bicameral conference must encourage capital formation and help maintain the strength of our capital markets," said Roundtable President and CEO Jeffrey DeBoer. "As our Q4 Index shows, 2017 was a positive and productive year for our industry. Asset values are high, and debt and equity capital remain widely available.”
Most executives polled said that they do not see material change for the commercial real estate market in the near term, although greater clarity on tax reforms is sought.
Many respondents cite difficulty sourcing new equity commitments from limited partners. While this has always been perceived as a challenging undertaking, the market's wariness of cycle timing is exacerbating the difficulty.
More than a third of respondents said that asset prices were up from a year ago but 54% said that expect them to hold steady over the coming year.
DeBoer added "The commercial real estate industry is a positive contributor to America's economy. As Congress continues to work toward comprehensive tax reform that supports healthy and balanced real estate markets, the commercial real estate industry should be well-positioned to put more people to work as business investment accelerates and the broader economy improves."
