2012: year of U.S. commercial real estate’s recovery?
Real estate in the Americas experienced a slowdown in 2011, as the European debt crisis and economic fits and starts at home inhibited the volume of commercial leasing and sales, but fundamentals point to a brighter 2012, according to Cushman & Wakefield’s Economic Pulse report, released today.
“The main drivers of growth — low interest rates, pent-up demand, balance-sheet improvement and healthier labor markets — are all still very much in place,” said Ken McCarthy, a senior economist at Cushman.
Office and industrial markets in the U.S. will see the mutually reinforcing factors of rising demand and limited supply lead to price increases. In 2011, a total of 9.6 million square feet of office space hit the market — a 15-year low.
Investment sales in the Americas were up 51 percent in 2011, and “improving fundamentals coupled with a still-healthy investor appetite” for real estate should create what the report calls “healthy growth.” Investment sales activity in the U.S. should increase by 25 percent year-over-year in 2012, the report says. However capital for investment sales is largely concentrated in New York, Washington D.C., Boston, San Francisco, Los Angeles and Toronto.
“While we have been in the midst of challenging economic times, there is now a growing sense of constrained optimism, and we anticipate the global economy to strengthen during the second half of 2012,” said Glenn Rufrano, Cushman’s CEO. — Guelda Voien