Dean Frankel, senior portfolio manager with Urdang Securities, says the biggest reason for optimism when examining the U.S. commercial real estate market is the lack of supply.
"Given that in some sectors it takes six to 24 months to build a supply pipeline, that is a big positive," says Frankel, adding that it is also encouraging that fundamentals appear to have already bottomed.
On the flip side, the macro issues that are tied to job growth continue to raise concern, according to Frankel.
"We need a lot of jobs to come back before companies utilize their existing space, let alone need space," Frankel says.
Regarding specific sectors, Frankel says he favors the apartment sector, followed by the storage sector. Also, he says hotels should perform well.