Economy Watch: CRE Execs Still Mostly Optimistic
- Jul 26, 2016
Akerman LLP’s seventh annual U.S. Real Estate Sector Report, which the national law firm released recently, found steady optimism among a majority of top commercial real estate executives, despite global jitters and a volatile investment market. Ninety-two percent of executives surveyed had little or no change in their optimism compared to last year, mainly due to strong U.S. real estate fundamentals.
After a six-year recovery, however, there’s also cyclic expectancy among CRE executives, and a sense that a slowdown is a sign of a healthy market correction. Even so, as long as the U.S. economy continues to show momentum, the Akerman Report expected positive activity through the end of 2016, including greater investor appetite in smaller markets and increasing focus on longer-term investment opportunities.
The respondents cited a number of trends that will have the most impact on short-term real estate development. One is generation-specific housing. Thirty-four percent of real estate executives believe the aging population and its housing preferences will have the greatest effect on real estate development in the next three to five years.
Another trend is “co-urbanism.” Twenty-nine percent of executives say changing lifestyle preferences in compact city centers and a shift to a sharing economy will have a significant impact on real estate development in the near-term. Along the same lines, 14 percent believe office mobility and collaborative workplace design are key trends shaping the next iteration of office buildings.
Also, 15 percent of real estate executives ranked the effects of technology as one of the most important issues impacting real estate. Ransomeware and other attacks designed to manipulate systems or seize private information have brought attention to the industry’s exposure to cyber risk, as well as the need to develop a security and privacy framework as technology in the sector advances.