Trends To Watch Out For In Commercial Real Estate in 2016

Posted by Staff Reporter ( on Jan 15, 2016 11:22 AM EST
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RFR'S 100 E 53rd ST Property Tops Offmore big
(L-R) Maro Riga of Foster + Partners, Robert Laudenschlager of SLCE, Rebekah Hieronymus of Foster + Partners, Ilya Mirgorodsky of William Georgis, William Georgis of William Georgis, Ross Fleming of RFR, Aby Rosen of RFR, Jay Solinsky of Classic Marketing, Kai-yan Lee of Vanke, Leonard Steinberg of Compass, Michael Ridloff of Vanke, Charles Rosemarino of RFR, James Lacancellera of Hines, John Lawrence of Vanke, Dominic Maher of Hines, and Sheldon Werdiger of RFR pose for a picture as RFR's 100 E 53rd St property tops off on January 13, 2016 in New York City. (Photo : Mike Coppola/Getty Images for RFR)

What Commercial Real Estate be like this 2016? What are the trends that investors should watch out for as this year unfold? These are just two of the many questions that stakeholders from the business enterprises are asking.

Business Insider reports that "the Federal Reserve is not seeing a lot of inflation right now." In fact, the Fed's recently released on Wednesday the "Beige Book," which "summarized how the economies in the Fed's 12 districts are performing."

It is noted how labor markets improves and employment increases in most districts. It is also stated in the "Beige Book" that activities in residential and commercial real estate have generally improved as well. District reports that "stronger activity tended to be cited for multifamily construction and commercial real estate. House prices and commercial rental rates also rose somewhat in most Districts."

According to National Real Estate Investor, "The U.S. property market landscape in 2016 will appear similar to that of 2015, with a number of interwoven aspects that bode well for savvy investors who can step out in front of ongoing, and in some cases intensifying, economic, demographic and technological trends."

The report mainly highlights the 6 Trends that experts in the real estate sector think to take part in commercial real estate in the upcoming year.

The number on trend being mentioned is the Global Urbanization. It is noted to continue in the United States and in other places. Boomers and Millennials will get more access to jobs from different sectors. Thus, demands of housing increases including office and other real estate property types.

Second, Interest rates on the rise. This might be expected since December 2016. However, "Forecasts vary, but the likelihood is that the FFR will rise at least to, or above, 1.0 in 2016, with 10-yr treasuries pushing fractionally higher, toward the 3.0 percent mark." There are still some factors that keep the rates at bay.

Third trend is the continued Increased International Capital Flows in U.S. Real Estate assets. Report says that the property market in the United States is the "most stable, transparent in the world, making it an easy investment choice."

The three other trends that play a significant role in commercial real estate in 2016 are the continued stress on retail, Continued limited supply additions, and Lower Energy Prices.

With all those 6 trends in commercial real estate in 2016, it is with a high hope that the overall condition of the national economy will be better off.

Say something about the trends in commercial real estate in 2016.

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