Monday, December 15, 2014

Deloitte's 2015 Commercial Real Estate Outlook

As we look forward to 2015, the macroeconomic environ- ment is expected to continue to improve. Our Deloitte Economics team expects positive change in important parameters such as job market indicators, including initial claims, unemployment rates, and job openings. Car sales remain strong, industrial production is accelerating, and exports are growing. The single-family housing sector — pricing and sales — continues to strengthen, albeit at a slow and inconsistent pace. These positive macroeconomic parameters could potentially provide a further boost to the strengthening CRE recovery. Looking at trends likely to dominate in 2015, to begin with, an improved economy will continue to bolster global investments in U.S. CRE. REITs are likely to continue to offer positive returns against benchmark indices, and investors will benefit from additional diversification opportunities from the growing number of REIT conversions in nontra- ditional property sectors. The private equity real estate (PERE) funds appear to be having more success raising new capital and have increased opportunity to recycle capital due to higher property prices. Therefore, both domestic and foreign capital inflow will continue.

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