Projection: CRE to Make Slow Progress in 2013
While economic uncertainty will continue to hinder corporate decision making and impede improvement in commercial real estate fundamentals well into 2013, according to Jones Lang LaSalle’s 2013 National Commercial Real Estate Outlook, there is good news as well. A recession is unlikely in 2013, Jones Lang LaSalle’s researchers concluded, but businesses, lenders, and investors are still waiting to see how legislators will deal with the “fiscal cliff,” which consists of tax cuts set to expire at the end of the year and federal spending decreases scheduled to begin in January.
With a new recession unlikely, the forecasters called for moderate performance improvement in the multifamily, hotel, and industrial sectors nationwide, while balanced new construction and absorption will negate any net change in retail fundamentals. The office market will see an increase in rent growth and net absorption in urban markets driven by technology, healthcare, and energy jobs, said CRE experts.
The 2013 Commercial Real Estate Outlook highlights include the prediction that there’ll be an emphasis on efficiency by reducing tenants’ operating costs through occupancy rightsizing; e-commerce will increase demand for large distribution centers; and “experience shopping,” and retail centers offering restaurants and entertainment to attract customers will fare best in an otherwise challenged retail landscape.