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Commercial Real Estate Outlook

Posted: February 24, 2014   Size: 1.1MB   Format:    Download

Market fundamentals in commercial real estate continue to improve but at a slower pace, according to the National Association of Realtors® quarterly commercial real estate forecast.

NAR’s latest Commercial Real Estate Outlook offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS, Inc., a source of commercial real estate performance information.

Highlights from latest CREO:

  • The economy proved resilient during 2013, despite “sequestration”, government shutdown, regulatory changes and other impacts.
  • Based on BEA’s preliminary estimates, gross domestic product advanced at a 1.9 percent annual rate in 2013, supported by a cautiously optimistic consumer and hedging businesses. The third quarter provided the largest boost, with growth of 4.1 percent, followed by a surprisingly robust fourth quarter, which recorded 3.2 percent annual growth rate.
  • Consumer spending remained positive throughout the year, surging at year-end 3.3 percent and providing much-needed tail wind to the economic balance.
  • After solid investments during the second and third quarters, business investments tapered at the end of the year. However, the government shutdown did not prove a stumbling block, as businesses increased investments by 3.8 percent in the fourth quarter.
  • For all of 2013, business investments advanced at a rate of 2.6 percent—moderate, but fitting the cautious approach to impending regulations, government budgetary wrangling and fiscal uncertainty.

List of Markets Covered

The Commercial Real Estate Outlook includes statistics on 54 of the nation's largest markets.

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