Research - APRIL 19, 2017

Capital outlook for U.S. real estate sector on the rise

by Released 4/19/17

Increased confidence in the commercial real estate market has taken hold since the U.S. presidential election, according to national law firm Akerman LLP's eighth annual U.S. Real Estate Sector Report. Fifty-three percent of investors and lenders are more optimistic about the 2017 outlook for the U.S. commercial real estate market, compared to only 38 percent last year.

The prospects of deregulation, tax reductions and stronger economic growth have renewed investor confidence. Sixty-four percent of real estate executives interviewed after the election say the Trump administration’s agenda will have a moderately or significantly positive effect on the industry. This number is up from 54 percent who were bullish about the pro-business presidential candidate during the 2016 campaign.

This increasingly optimistic view of the market is tempered by new uncertainties. The potential impact of a rising interest rate environment and the unintended consequences policy changes could have on the U.S. economy are top of mind for real estate executives, according to the Akerman report (85 percent). Nearly 12 percent see the rise in purchase prices as another pressing issue affecting the real estate sector. Several say the risk of reduced cap rates and higher borrowing costs will continue to drive investors to secondary and tertiary markets, and new creative segments.

This shift in confidence and market momentum is reflected in a number of key findings from the Akerman Report. Additional findings are highlighted in the following press release: Capital Outlook for U.S. Real Estate Sector on the Rise, Annual Akerman Report Finds or please click here to view the Report.

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