Commercial Market Outlook - NAR's Chief Economist Lawrence Yun

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

Moderate GDP Growth

Total Job Gains(in millions from 12 month ago)

Jobs: Private vs. Public(index = 1 in 1990)
1990s Federal Government Job Cuts

Federal Budget Surplus/Deficit

Federal Government Spending/Revenue

Private Sector Construction (Minimal new inventory addition helps vacancy rate to fall)
Value Put-in-Place in $ million

U-Turn in Commercial Sales(for properties valued at $2.5 million or higher)
RESEARCH

REALTORS® Commercial Market Survey
RESEARCH

REALTORS® Commercial Sales Trend
Modestly Getting Better
RESEARCH

Commercial Debt CMBS Markets
RESEARCH

Commercial Lending
RESEARCH

REALTORS® Commercial Lending Survey
RESEARCH

Commercial Equity Markets
RESEARCH

Commercial Price Index
RESEARCH

Commercial Distress
RESEARCH

REALTOR® Commercial Market Survey on Price
RESEARCH

Cap Rates(Steady Apartment and Swinging Office)
RESEARCH

U.S. Treasury Yields(1% point rise in blended interest rate will mean $2 trillion in extra government outlay over the next 10 years)

Office Fundamentals
RESEARCH

Office Rents
RESEARCH

Financial Activity and Professional Business Service Job Gains(in thousands from 12 month ago)

Office Vacancies
RESEARCH

Industrial Fundamentals
RESEARCH

Industrial Rents
RESEARCH

Wholesale Inventory Bouncing Back (Value in $ million)

Industrial Vacancies
RESEARCH

Retail Fundamentals
RESEARCH

Retail Rents
RESEARCH

Retail Sales Bouncing Back(% change from 12 month ago; excluding autos/parts)

Sluggish Retail Sector Job Gains(in thousands from 12 month ago)

Retail Vacancies
RESEARCH

Sluggish Wholesale Trade Job Gains(in thousands from 12 month ago)

Multifamily Fundamentals
RESEARCH

Multifamily Rents
RESEARCH

Renter Households
In million

Multifamily Vacancies
RESEARCH

Fundamentals
Improving economy and job market
No overbuilding … increased absorption means falling vacancy
Real estate hedge play from inflation
But interest rates will be rising
Refinancing in 5 years ? … be prepared
Higher rents, but not necessarily higher property prices from rising cap rates

Economic Forecast

Commercial Market Forecast

Commercial Market Outlook - NAR's Chief Economist Lawrence Yun

by Brian Pilon on May 19, 2011

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Commercial Market Outlook - NAR’s Chief Economist Lawrence Yun — Presentation Transcript