November 29, 2018
Houston – A U.S. Congress divided in the wake of the 2018 midterm elections is less likely to hinder continued economic growth or dampen demand for commercial real estate, Transwestern contends in its latest outlook. Two years of anticipated gridlock ease fears that political or economic policy changes will derail business expansion plans, setting the stage for further job creation and modest gross domestic product (GDP) growth of about 2.0 percent in 2019.
“With surging corporate profits spurring continued job growth, we’re seeing healthy demand for nearly all types of commercial property,” said Elizabeth Norton, Managing Research Director, Mid-Atlantic Region. “Strong fundamentals point to attractive returns from real estate investments compared to stocks and bonds, as well as ongoing demand for both debt and equity.”
Most notably, the U.S. industrial market remains red-hot with record-high port volumes, positive absorption and a vacancy rate that remained below 5 percent in the third quarter, despite the addition of new inventory. Prelease commitments in the sector are offsetting a large percentage of the 376 million square feet of new construction. The robust demand is expected to continue, as employment is trending up in construction, manufacturing, transportation and warehousing, and analysts anticipate a strong holiday shopping season.
While not as stellar as the industrial sector, the office market is enjoying stable vacancy and modest asking rent appreciation nationally. October’s 3.7 percent jobless rate signaled full employment by historical standards, but Transwestern expects recent retirees and others not counted as unemployed to re-enter the workforce in the coming year. Still, with dim prospects for increased immigration, a labor shortage could begin challenging economic growth by early 2020.
Read the full report at: http://twurls.com/briefing1118
Transwestern is a privately held real estate firm of collaborative entrepreneurs who deliver a higher level of personalized service – the Transwestern Experience. Specializing in Agency Leasing, Asset Services, Occupier Solutions, Capital Markets and Research, our fully integrated global enterprise adds value for investors, owners and occupiers of all commercial property types. We leverage market insights and operational expertise from members of the Transwestern family of companies specializing in development, real estate investment management and research. Transwestern has 33 U.S. offices and assists clients from more than 219 offices in 37 countries through strategic alliances with France-based BNP Paribas Real Estate and Canada-based Devencore. Experience Extraordinary at transwestern.com and @Transwestern.