Calvin Schnure

The Federal Reserve Bank of New York reported last week that household debt increased $193 billion in the fourth quarter to a record-high $14.15 trillion, prompting some concerns about possible risks to the economic outlook from rising indebtedness.

Rising GDP and the job growth that goes with it are the most important determinants of demand for real estate, as businesses need more office space for workers and industrial space to produce, store and ship goods.

A moderate supply of new buildings is helping to keep vacancy rates low and reduces risks of a market downturn due to excess construction in the months and years ahead.

Today’s economic environment has no historical precedent. What markers can we rely on as the economy and commercial real estate move into uncharted waters?

Nonfarm payrolls rose 266,000 in November, well above consensus forecasts and the strongest gain since January.

Earnings growth broadened across the REIT sector in the third quarter, with 65.9% of REITs reporting higher FFO than one year ago.

The economic fundamentals for CRE markets maintained momentum in Q3, with GDP growth on trend and modest job gains.

How likely is it that the current slowing could lead to a recession? How exposed are real estate markets and REITs to deteriorating macroeconomic fundamentals?

Commercial property prices can be a double-edged sword. When they are rising, they can provide investors with solid capital gains above and beyond the income received from rents. But if they rise too rapidly and get ahead of fundamentals, investors risk losses from falling prices.

The JOLTS report on labor market turnover can help shed light on the outlook for the economy and for real estate.

It is important during periods of market volatility and shifting economic fundamentals for investors to recall the concerns that not long ago dominated discussions about the outlook.

An inverted yield curve has preceded past recessions, yet other indicators today carry a stronger signal of a resilient economy.