CRE Outlook Remains Strong Despite GDP Growth Shortfall
U.S. Economic Recovery Underway, Varies by Sector
- GDP grew by an annualized rate of 6.5% in 2Q, a bit below expectations but higher than pre-pandemic levels
- In the first half of 2021, new job creation and core retail sales exceeded any other first half period
- Air travel and consumer confidence near pre-pandemic levels; home sales elevated, but supply constrains linger
Economic Recovery Strengthening CRE Demand
- Economic recovery driving demand for Apartments, Industrial, Retail, Hotels, Seniors Housing and Self-Storage
- Office space demand still lagging, but absorption turned positive in 2Q; first time since the pandemic began
- Strong growth taking investors off the sidelines, bolstering market liquidity and reviving transaction activity
Will the Real Estate Market Maintain its Momentum?
- Rising debt availability for most asset types and expectations of low interest rates should sustain liquidity
- New COVID-19 variants and possible tax changes could emerge as headwinds, but outlook remains sanguine
* Through 2Q
Sources: Marcus & Millichap Research Services, BEA