The slight upticks in the "Overall" and "Current" indices (to 70 and 72, respectively) since the previous quarter are in keeping with last week's positive reports about higher-than-expected GDP growth during April, May and June, and the creation of 240,000-plus jobs, on average, during each of the past six months. The "Future" index is back up to 67 after a two-point drop last quarter, but is one point lower than at this time last year -- reflecting a lingering wariness among industry executives about prospects for a sustainable economic recovery. Data for the current survey was gathered
"Commercial real estate remains on a generally positive path, yet there is significant concern about
"Survey respondents also cite interest rate policy -- and the broader issue of borrowing costs -- as a 'wild card' that could hurt property valuations," DeBoer continued, noting that assets in some markets are still recovering from declines of as much as 40-50 percent during the Great Recession.
Although capital availability is reportedly strong, DeBoer explained that access to capital is still predominantly weighted toward urban "gateway" markets, highly-rated assets, and borrowers with pristine credit scores. As for reports of increased inflows of foreign capital, DeBoer said real estate's share of investment from overseas remains low compared to sectors such as manufacturing, financial services, and energy.
Thus, The Roundtable continues to urge reform of the
"Given the uncertainty over TRIA, which is already affecting policyholders seeking to renew terrorism insurance policies beyond year-end -- and the prospect of higher borrowing costs as the Fed weighs how to wind down its extraordinary monetary policy stimulus -- the lackluster outlook expressed in the latest survey about the coming year is not very surprising," said DeBoer.
What is needed, he concluded, is for "U.S. policymakers to work toward creating a more attractive overall climate for job creation and investment, since these are critical to real estate's health. If real estate is healthy -- commercial and residential -- so, too, will be the broader economy."
For the full survey report and The Roundtable's 2014 Policy Agenda (Together: Real Estate, Jobs, Economic Growth) and 2014 Annual Report (Leadership-Action-Solutions: Celebrating 15 Years), visit us online at www.rer.org.
Photo - http://photos.prnewswire.com/prnh/20140603/93816
SOURCE Real Estate Roundtable
Keywords for this news article include: Legal Issues, Real Estate Roundtable.
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