Sentiment has increased in the first quarter of 2020 according to the Real Estate Roundtable
Limited overbuilding and conservative overall industry debt have helped boost sentiment among commercial real estate executives in the US.
The Real Estate Roundtable's 2020 Q1 Economic Sentiment Index shows a 3 point increase from the last quarter of 2019 to a score of 52, thanks to generally balanced markets, continued job growth, and low interest rates.
"As our Q1 index shows, we are beginning a new decade optimistic about continued overall economic growth," said Roundtable President and CEO, Jeffrey D. DeBoer. "Commercial real estate markets remain fundamentally sound; supply and demand are in relative balance; debt and equity capital markets are functioning and disciplined; wages are rising; and unemployment is low.”
However, there are potential headwinds. For example, many of the CRE executives noted that election years are notoriously unpredictable and point to a large volume of transactions already underway as platforms attempt to execute before the summer.
"There is natural concern regarding the uncertainty of the coming presidential election. However, the commercial real estate industry's leading executives are positive about today's economy and optimistic about future market conditions,” added DeBoer.
Asset values remain elevated across most property types and geographies. While certain respondents suggest that asset values have room to grow, others view current pricing as being at peak levels.
