Steve Brown | The Dallas Morning News
More construction cranes will be sprouting on America’s skylines. The commercial real estate sector is forecasting one of the longest periods of expansion on record. Top players predict that investment and returns in U.S. real estate will stay strong through 2017.
The forecast is for almost $500 billion a year in transactions over the next three years, according to a new study by the Urban Land Institute, which is meeting in Houston this week. The Washington, D.C.-based organization is the country’s largest commercial real estate association.
“Real estate volumes have been growing steadily,” said Urban Land Institute’s William Maher, a director with LaSalle Investment Management. “It looks like they will continue to grow in 2015.
“For real estate, it’s really about jobs,” Maher said. “This is the highest rate of job growth we have had for 15 years.”
The U.S. commercial property market has been expanding since 2010, following a sharp downturn during the recession.
Transaction totals are expected to increase this year and in 2016 to almost twice the 14-year annual average.
No surprise then that average commercial property prices are jumping.
“Last year it was up 13 percent — an enormous number,” Maher said. “This year it’s forecast for 10 percent, but trailing down.”
Even with higher price tags on many properties, the returns are high enough to continue attracting investment dollars, top industry execs say. Read more