- January 1, 2016: Vol. 28, Number 1

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A favorable year: 2016 outlook

by Michael Lester

In the fall of 2015, ULI surveyed 48 real estate analysts and economists, asking for their predictions for real estate capital markets, property investment returns, vacancy rates and rents. The 46-page report, ULI Real Estate Consensus Forecast, was upbeat, projecting solid increases in all sectors “except not so much gain in retail.” This three-year forecast (for 2015 through 2017) portends mostly favorable real estate conditions.

In 2016:

•          GDP growth is expected to reach a healthy 2.8 percent.

•          Unemployment is expected to decline to 4.9 percent.

•          Inflation is expected to continue to increase “to a steady and healthy 2 percent.”

•          Ten-year Treasury rates are projected to rise to 2.8 percent.

•          Issuance of commercial mortgage–backed securities is projected to increase steadily to $130 billion.

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