Turbulent Times

Commercial Real Estate Weathers Turbulent Times

Source: nreionline.com

Despite the Standard & Poor’s downgrade of U.S. debt, a worsening European sovereign debt crisis and rising stock market volatility, the U.S. economy continues to expand and create new jobs, supported by strong consumer spending and business investment.
Over the past 12 months (as of the end of October), payroll employment has increased by an average of 125,000 jobs per month. However, the pace is not fast enough to lower the unemployment rate. As a result, we do not expect employment to return to its prior peak until 2016. Overall, employment growth appears to be strong in health care, high tech and energy, but is disappointing in finance, government and construction.

Commercial real estate performance generally lags in economic growth by about four to six quarters. U.S. commercial real estate fundamentals continue their recovery path. Demand for commercial space and net absorption has increased, although general leasing activity slowed moderately during the third quarter of 2011.

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