The nation's commercial real estate (CRE) sector is likely to continue a slow, ‘bifurcated’ recovery over the coming year, with top urban markets outpacing recovery in secondary, non-gateway markets, according to The Real Estate Roundtable's latest quarterly ‘Sentiment Survey’ of senior commercial real estate executives.
The Overall Sentiment Index for the second quarter of this year was unchanged since the last quarter, at 77. However, the Real Estate Roundtable adds that the inversion of the Future and Current Indices suggests a moderating, though still positive, trend. The Sentiment Index is measured on a scale of 1 to 100. To reach an Overall Index of 100, all survey respondents would have to answer that market metrics are ‘much better’ today (current conditions) compared to one year ago, and also will be ‘much better’ 12 months from now (future conditions).
‘It's all about jobs,’ says Roundtable President and CEO Jeffrey DeBoer. ‘Individual segments of the market may be recovering, but until private-sector job creation picks up, we will not be out of the economic danger zone. The huge pipeline of maturing commercial mortgages and large fiscal issues facing state and local governments are additional headwinds that could impact recovery in the broader economy and CRE. The flatter trajectory we're seeing in the [second quarter] Sentiment Index is a reflection of these ongoing economic risks and uncertainty.’
The survey report is available online.
