Commercial real estate investments are expected to produce solid returns this year, according to an annual forecast report released by the Real Estate Research Corporation, Deloitte, and the National Association of REALTORS®.
“We have seen steady, if slow, progress since the commercial real estate market collapsed in second quarter 2008, and as the future unfolds, we expect that the positive returns for commercial real estate will continue,” says Kenneth Riggs Jr., president and CEO of RERC. “The value increase from the trough is now about 30 percent, just slightly less than the value lost during the past 6 years. Although returns are likely to be positive in 2014, we forecast them to be a little lower than in 2013, but still a very reasonable approximate average of 8.75 percent.”
Researchers say they have a “cautiously optimistic” outlook for commercial real estate after recent stabilization, according to the report.
Lawrence Yun, NAR’s chief economist, says the commercial real estate recovery will continue as economic growth gets slightly stronger in 2014.
—By REALTOR® Magazine