Commercial property transaction volume expected to decline
Commercial property transaction volume is expected to decline over the next three years to $475 billion in 2018, according to a new three-year economic forecast from the Urban Land Institute (ULI) Center for Capital Markets and Real Estate.
However, this volume forecast over the next three years is surpassed only by volumes in 2007 and 2015; and follows six years of commercial property volume growth.
The latest ULI Real Estate Consensus Forecast, a semi-annual outlook, is based on a survey of 48 of the industry’s top economists and analysts representing 36 of the country’s leading real estate investment, advisory, and research firms and organizations. The survey, conducted in March, provides forecasts on broad economic indicators; real estate capital markets; property investment returns for four property types; vacancy and rental rates for five property types; and housing starts and prices.
Overall, the recent Consensus Forecast for April 2016 projects continued economic expansion over the next three years but at a somewhat slower pace than the prior two years. It also anticipates continued commercial price appreciation and positive returns, but at more subdued and decelerating rates; above-average but decelerating rent growth rates in all property sectors, and better than average vacancy/occupancy rates, except for retail. Single family housing starts are projected to continue increasing, but remain below the long-term average. Source: PRNewswire