Rising Commercial Real Estate Industry Optimism | Business Observer

Three well-known groups in the commercial real estate industry and local experts assume that the industry will recover dramatically in the second half of this year and after 2022, according to the newly conducted research.

According to a new member survey by the Society of Industrial and Office Realtors (SIOR), 74% of all commercial real estate transactions are on schedule, more than twice as many as in the second quarter of 2020 …

NAIOP, which consists of office and industrial developers, has actively absorbed office space (defined as more rented space than available space) nationwide in the last three months of this year. I assume that I will come back. Office leasing has been badly affected since the COVID-19 pandemic, as many tenants have given up their offices or vacated quarters for sublet.

Meanwhile, the Urban Land Institute (ULI) expects US retail real estate trading volume to exceed $ 500 billion this year, more than $ 100 billion more than the historical average and forecast last October.

Each of the three groups attributed the expected improvement to higher vaccination rates and overall economic effects.

“As vaccinations rise and the economy opens up, demand is high and trade is moving at a rate that was not seen before the pandemic,” SIOR said. “The leasing activities are at the pre-pandemic level. It exceeded the conditions reported a year ago and outperformed the development. “

“The macroeconomic data are positive and the containment of pandemics through vaccinations and other measures has had a significant impact,” said Thomas Bisacquino, chairman and CEO of NAIOP, in a statement.

The positive forecasts of the industrial groups follow the equally enthusiastic outlook of the large commercial real estate brokers CBRE Group, JLL, Marcus & Millichap, Korea, Cushman & Wakefield and Newmark. I was beaten.

From the Gulf to Central Florida, broker leaders agree that the rest of the business should be strong in 2021.

“Of course, I think the level of activity, the number of calls and inquiries we receive, the number of tours we take are busier or busier than before the pandemic, depending on the type of facility. “I will,” says Danny. Rice, who heads the business of Collier commercial real estate agency in central and southwest Florida.

“This is not a finalized deal, but from what we see we expect things to recover significantly in the second half of this year.”

“I’m optimistic about Tampa and the central Florida area,” said Tim Rivers, Florida’s leader for commercial real estate agency JLL.

“Florida as a whole has done a great job creating an environment that is suitable for live work play, so people want to be here.”

All three industry groups cite the forecast growth rates of the gross domestic product (GDP) for this and next year as well as the federal government’s stimulus packages as the main reasons for the forecast.

ULI is forecasting GDP growth of 6.5% this year. This is the highest growth rate since 1984. NAIOP is even more bullish. We expect GDP growth to reach 7.7% over the next two years as the unemployment rate falls.

All three groups agree that industrial real estate will continue to develop better and that multi-family leasing projects will be delayed.

When the company returns to the office, the office space will also be restored. NAIOP expects quarterly US office absorption to average 11.7 million square feet in 2022, similar to 2015-2019 levels.

According to a SIOR survey, the letting activity of members, especially in office and industrial projects, has almost doubled in the last two quarters. More than 60% of respondents say they operate leasing, but only 36% in the group’s previous survey.

ULI’s analysis is even more enthusiastic. Based on the views of more than 80 economists and real estate analysts, the group said this year’s trade volume would exceed $ 500 billion, a long-term average of $ 347 billion in the United States and about $ 427 billion in 2020 expect it.

Next year, ULI expects to close $ 550 billion, which will rise to about $ 590 billion in 2023.

Many respondents say they continue to worry about uncertainty and rising construction costs, but wood and concrete costs have risen dramatically over the past year. The feelings about leasing, development and other activities are mostly positive.

“Sure, we are still in the wait and see summer, but the level of activity so far from the pandemic is more positive than I expected at the time, and we expect it to continue well. 2022, ”says Korea’s rice.