The U.S.A. economic outlook for this year for all major commercial real estate sectors, are expected to have extensive growth because of the impact of President Donald Trump's economic and business reactivation policies; tax reform, infrastructure spending, immigration policy, health care policy, business spending, deregulation and investment among others.
The country's continued economic resurrection and rising employment in 2018, should benefit all major asset classes.
U.S. office market growth should continue in 2018, but at a slower pace, due to higher completions and the tight labor market's impact on tenant demand.
Industrial & Logistics:
Although we are well along in the economic cycle, in the e-commerce/multi-channel cycle we are not, so demand for high-quality, well-located industrial real estate should not wane anytime soon. In most markets, a lack of quality space options is challenging those seeking to expand their supply chains.
Changing demographics, consumer expectations and multi-channel retailing will continue to reshape retail and its real estate environment in 2018. The consumer trend toward off-price and discount retail will continue, with mid-range retailers seeking new ways to limit share losses to lower-priced players.
Developers are poised to register the second-highest annual completions count of this cycle in 2018, down by 9.2% from 2017's cycle peak. Because apartment starts began to slow in 2017, the multifamily market will get a reprieve from new supply by late 2018 and throughout 2019.
Forecasts for continued U.S. economic expansion portend a favorable year ahead for the U.S. lodging industry, with forecasts of income and employment growth, coupled with slowing supply growth, promising increased demand for hotels.
The U.S. wholesale data center market continues to thrive, with sustained record-setting absorption levels for the past three years. Transformation and flexibility are the key themes in the multi-tenant data center space in 2018.
The direction of health care policy and payment mechanisms may remain uncertain, but rapid growth in the older population will remain a significant tailwind for medical-office demand in the years ahead.
The seniors housing market improved in 2017 and is set to improve further in 2018, largely due to lower construction levels.
Winston Rowe & Associates prepared this article. They are a national due diligence and advisory firm specializing in structuring complex commercial real estate transactions.
They can be contacted at 248-246-2243 or visit them online at http://www.winstonrowe.com
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