The economic forecasts in the previous months may have made you feel like you were on a roller coaster, but the longer term forecasts are looking optimistic. A recent article by the MBA acknowledged that the “Two commercial real estate leading indicators–the Dodge Momentum Index and the Architecture Billings Index–diverged slightly in February, but both point to more construction activity within a year,” which was supported by improvements to construction and manufacturing indices in March.
In addition, a panel of real estate economists predicted CRE property transactions to reach a 10 year high in 2016. The semi-annual Urban Land Institute/Ernst & Young Real Estate Consensus Forecast projects the overall economy to grow along with commercial real estate growing at moderate rates.
Sentiments of caution voiced at the MBA CREF conference in February remain throughout the industry, however the commercial side of lending appears to be heading in the right direction and continued growth projections are good news for all.