Commercial Real Estate Market Outlook<br />Lawrence Yun, Ph.D.<br />Chief Economist<br />NATIONAL ASSOCIATION  OF REALTORS...
Moderate GDP Growth<br />
Total Job Gains(in millions from 12 month ago)<br />
Jobs: Private vs. Public(index = 1 in 1990)<br />1990s Federal Government Job Cuts<br />
Federal Budget Surplus/Deficit<br />
Federal Government Spending/Revenue<br />
Private Sector Construction (Minimal new inventory addition helps vacancy rate to fall) <br />Value Put-in-Place in $ mill...
U-Turn in Commercial Sales(for properties valued at $2.5 million or higher) <br />RESEARCH<br />
REALTORS® Commercial Market Survey<br />RESEARCH<br />
REALTORS® Commercial Sales Trend<br />Modestly Getting Better<br />RESEARCH<br />
Commercial Debt CMBS Markets<br />RESEARCH<br />
Commercial Lending<br />RESEARCH<br />
REALTORS® Commercial Lending Survey<br />RESEARCH<br />
REALTORS® Commercial Lending Survey<br />RESEARCH<br />
Commercial Equity Markets<br />RESEARCH<br />
Commercial Price Index<br />RESEARCH<br />
Commercial Distress<br />RESEARCH<br />
REALTOR® Commercial Market Survey on Price<br />RESEARCH<br />
Cap Rates(Steady Apartment and Swinging Office)<br />RESEARCH<br />
U.S. Treasury Yields(1% point rise in blended interest rate will mean $2 trillion in extra government outlay over the next...
Office Fundamentals<br />RESEARCH<br />
Office Rents<br />RESEARCH<br />
Financial Activity and Professional Business Service Job Gains(in thousands from 12 month ago)<br />
Office Vacancies<br />RESEARCH<br />
Industrial Fundamentals<br />RESEARCH<br />
Industrial Rents<br />RESEARCH<br />
Wholesale Inventory Bouncing Back  (Value in $ million)<br />
Industrial Vacancies<br />RESEARCH<br />
Retail Fundamentals<br />RESEARCH<br />
Retail Rents<br />RESEARCH<br />
Retail Sales Bouncing Back(% change from 12 month ago; excluding autos/parts)<br />
Sluggish Retail Sector Job Gains(in thousands from 12 month ago)<br />
Retail Vacancies<br />RESEARCH<br />
Sluggish Wholesale Trade Job Gains(in thousands from 12 month ago)<br />
Multifamily Fundamentals<br />RESEARCH<br />
Multifamily Rents<br />RESEARCH<br />
Renter Households<br />In million<br />
Multifamily Vacancies<br />RESEARCH<br />
Fundamentals <br /><ul><li>Improving economy and job market
No overbuilding … increased absorption means falling vacancy
Real estate hedge play from inflation
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Commercial Market Outlook - NAR's Chief Economist Lawrence Yun

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Commercial Real Estate Market Outlook
Lawrence Yun, Ph.D.
Chief Economist
NATIONAL ASSOCIATION OF REALTORS®


Presentation at NAR Midyear Legislative Meetings
Washington, D.C.

May 12, 2011

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Commercial Market Outlook - NAR's Chief Economist Lawrence Yun

  1. 1. Commercial Real Estate Market Outlook<br />Lawrence Yun, Ph.D.<br />Chief Economist<br />NATIONAL ASSOCIATION OF REALTORS®<br />Presentation at NAR Midyear Legislative Meetings<br />Washington, D.C. <br />May 12, 2011<br />
  2. 2. Moderate GDP Growth<br />
  3. 3. Total Job Gains(in millions from 12 month ago)<br />
  4. 4. Jobs: Private vs. Public(index = 1 in 1990)<br />1990s Federal Government Job Cuts<br />
  5. 5. Federal Budget Surplus/Deficit<br />
  6. 6. Federal Government Spending/Revenue<br />
  7. 7. Private Sector Construction (Minimal new inventory addition helps vacancy rate to fall) <br />Value Put-in-Place in $ million<br />
  8. 8. U-Turn in Commercial Sales(for properties valued at $2.5 million or higher) <br />RESEARCH<br />
  9. 9. REALTORS® Commercial Market Survey<br />RESEARCH<br />
  10. 10. REALTORS® Commercial Sales Trend<br />Modestly Getting Better<br />RESEARCH<br />
  11. 11. Commercial Debt CMBS Markets<br />RESEARCH<br />
  12. 12. Commercial Lending<br />RESEARCH<br />
  13. 13. REALTORS® Commercial Lending Survey<br />RESEARCH<br />
  14. 14. REALTORS® Commercial Lending Survey<br />RESEARCH<br />
  15. 15. Commercial Equity Markets<br />RESEARCH<br />
  16. 16. Commercial Price Index<br />RESEARCH<br />
  17. 17. Commercial Distress<br />RESEARCH<br />
  18. 18. REALTOR® Commercial Market Survey on Price<br />RESEARCH<br />
  19. 19. Cap Rates(Steady Apartment and Swinging Office)<br />RESEARCH<br />
  20. 20. U.S. Treasury Yields(1% point rise in blended interest rate will mean $2 trillion in extra government outlay over the next 10 years)<br />
  21. 21. Office Fundamentals<br />RESEARCH<br />
  22. 22. Office Rents<br />RESEARCH<br />
  23. 23. Financial Activity and Professional Business Service Job Gains(in thousands from 12 month ago)<br />
  24. 24. Office Vacancies<br />RESEARCH<br />
  25. 25. Industrial Fundamentals<br />RESEARCH<br />
  26. 26. Industrial Rents<br />RESEARCH<br />
  27. 27. Wholesale Inventory Bouncing Back (Value in $ million)<br />
  28. 28. Industrial Vacancies<br />RESEARCH<br />
  29. 29. Retail Fundamentals<br />RESEARCH<br />
  30. 30. Retail Rents<br />RESEARCH<br />
  31. 31. Retail Sales Bouncing Back(% change from 12 month ago; excluding autos/parts)<br />
  32. 32. Sluggish Retail Sector Job Gains(in thousands from 12 month ago)<br />
  33. 33. Retail Vacancies<br />RESEARCH<br />
  34. 34. Sluggish Wholesale Trade Job Gains(in thousands from 12 month ago)<br />
  35. 35. Multifamily Fundamentals<br />RESEARCH<br />
  36. 36. Multifamily Rents<br />RESEARCH<br />
  37. 37. Renter Households<br />In million<br />
  38. 38. Multifamily Vacancies<br />RESEARCH<br />
  39. 39. Fundamentals <br /><ul><li>Improving economy and job market
  40. 40. No overbuilding … increased absorption means falling vacancy
  41. 41. Real estate hedge play from inflation
  42. 42. But interest rates will be rising
  43. 43. Refinancing in 5 years ? … be prepared
  44. 44. Higher rents, but not necessarily higher property prices from rising cap rates</li></li></ul><li>Economic Forecast<br />
  45. 45. Commercial Market Forecast<br />
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