The Commercial Real Estate Industry Continues its Upward Trajectory

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Commercial real estate—and its economic trajectory—was the topic of a recent forum at the REALTORS® Legislation Meetings & Trade Expo, and it made one thing clear: growth will continue in the marketplace. As the National Association of REALTORS® (NAR) outlines, a panel led by Dr. Lawrence Yun, chief economist of NAR, discussed “the economic forces shaping commercial real estate markets and how high-tech company expansions, such as Amazon, will have a significant effect on regions across the country.”

As Yun outlined in the discussion, “We may see commercial real estate prices rise for the next year, but I expect them to even out in 2020. Capital gain returns have grown from 90% with the rise in property prices. We can attribute the growth in commercial building investment spending to job additions and rising occupancy of buildings.”

The industry’s largest difficulty continues to be waning inventory, in addition to rising construction costs and regulation, and the impact of the thriving e-commerce industry. These factors mean that multifamily and industrial properties are generally the top performing assets, because apartment vacancy rates are low in much of the U.S. and e-commerce has increased demand for industrial real estate properties to be used as warehouses and shipping/distribution centers.

For more on the latest commercial real estate trends, read the full article here.