The Market Commentary blog on reit.com presents analysis of the macro- and micro-economic fundamentals impacting the REIT and commercial real estate industry. The Nareit economics team offers their commentary on the state of the market, the outlook for commercial real estate and breaking macroeconomic news. The opinions set forth here are solely those of its author(s), and do not necessarily reflect the views of the Nareit or its membership.
Economic Update (December 13, 2012)
Commercial Property Update 2012:Q4 (February 7, 2013)
Economic Update (February 28, 2013)
Economic Update (April 10, 2013)
Economic Update (April 26, 2013)
Economic Update (April 30, 2013)
Commercial Property Update 2013:Q1 (May 9, 2013)
Economic Update (May 10, 2013)
Commercial Property Update 2013:Q2 (August 6, 2013)
Economic Update
Rising borrowing demand and supply of commercial credit indicate that a broader recovery is underway. There are new signs of life in the commercial mortgage market that indicate a strengthening of the recovery in the commercial property sector. The Federal Reserve’s Senior Loan Officer Survey shows that nearly half of all banks report stronger demand for commercial loans.
Commercial Property Update 2013:Q3
The picture was mixed across property types, with apartments enjoying strong demand as vacancy rates push yet lower, the office sector experiencing a slow recovery, and retail sector still barely out of the starting gate. The job market firmed a bit in recent months but still lacks vigor. Household formation lost steam, leading to less demand for apartments in the near term (or perhaps reflecting a lack of availability).
Signs of financial healing in the third quarter
The economy showed more signs of financial healing in the third quarter, according to the Federal Reserve Board’s Flow of Funds Accounts. Commercial lending strengthened as transactions and prices picked up. Commercial mortgage net lending increased to nearly $80 billion annualized, the strongest since prior to the financial crisis. Commercial banks provided $55 billion, roughly two-thirds of the total net lending. Life insurance companies increased their net position by the largest amount since the crisis, and net issuance of CMBS was positive for only the second time since 2007.