CRE industry execs remains cautious for third quarter

by Steve Randall19 Aug 2019

Commercial real estate executives remain generally optimistic about the industry in the third quarter of 2019.

They see balanced and stable economic market conditions but remain cautious due to potential headwinds according to the Real Estate Roundtable’s 2019 Q3 Sentiment Index.

"Industry executives are entering the second half of the year with confidence in stable market fundamentals, supported by a solid economy with low employment," said Real Estate Roundtable president and CEO Jeffrey DeBoer. "Although there is political uncertainty and the economic recovery is historical in length, commercial real estate market dynamics remain sound, with balanced supply and demand in most markets, and debt and equity readily available, particularly for high grade investments.”

The index was down 1 point from the previous quarter as confidence in today’s market was dampened by several concerns.

Respondents feel that the market has become fragmented and is best viewed as a range of separate but correlated markets distinguished by geographic location and property type.

The next 12 months

Although many feel that a change in market conditions is imminent although cannot pinpoint an exact reason for a decline; almost half believe that market conditions will be similar in a year from now.

Asset prices remain high for the best assets in the best locations and 50% say values are about the same as a year ago. But while many question whether the real estate cycle may be nearing an end and prices could decline in the near future, 60% believe real estate asset values will be the same one year from now.