Economy Watch: CRE Losing Some Steam?


UCLA Anderson Forecast’s senior economist discusses the signs of a slowdown and which sectors are more at risk than others.

David ShulmanDavid Shulman

“These are heady times for commercial real estate,” began UCLA Anderson Forecast Senior Economist David Shulman in his latest monthly letter about real estate, which was released recently. He ticked off the reasons: cheap money; low levels of new construction (except for apartments); and only modestly improving demand. As a result, CRE values have more than doubled from their financial-crisis lows of 2009. Heady indeed.

On the other hand, hints of a slowdown loom. “Prices are leveling off as investors have become concerned that the period of extraordinarily low interest rates may soon be coming to an end,” he explained. “In addition, job growth—the source of much real estate demand—will inevitably slow as the economy approaches full employment. At the same time, supply will pick up as more construction is completed in 2017 and 2018.”…

Economy Watch: CRE Losing Some Steam?

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