2017 Commercial Real Estate Forecast
An amazing future for commercial real estate has been predicted by forecasters for our area with growth in every area and more to come! Some of the major “takeaways” from a recent forecasting meeting for the coming year indicate the following exciting advancements:
We are starting off the 2017 Year in a great position, because 2016 “Exceeded Expectations” in many ways.
- Vacancy was down to 10.1% in the “Office” market, which is the lowest level since the year 2000.
- Class A Office Space Reached an historical rate, having crossed the $25 per square foot for the first time.
- There was a significant increase in speculative development.
- Suburban markets re-emerged as cost effective options.
- Rent growth and limited Class A Space drove development activity.
- There was an increase in average asking rental rate in the “Retail” arena.
- In the “Retail” arena there has been a significant market disruption due to technology and shifting consumer habits of ordering online!
- In the “Investment” arena, pricing is strong across all product types, in particular office and multifamily.
- In the “Office” market conditions will favor Landlords and rental rates will continue to rise, but at a slower pace.
- In the “Industrial” Market there will be increased speculative construction, and e-commerce growth will drive the need for the development of more modern facilities.
- Re-purposing of existing buildings as well as e-commerce advancement is changing the way real estate is being used and bringing new uses and new vendors to the area!
- The Index of Consumer Sentiment is the Highest it has been in Years! (Faith in the Economy has Returned).
- In terms of a healthy economy locally speaking: RDU ranked #7 on the list of “Markets to Watch” for overall Real Estate Prospects in 2017!
- The Triangle will continue to be a magnet for Investors in 2017, and the availability of capital will support sales.