Development Magazine Summer 2011

Perspectives

First Look – NAIOP Confidence Report Indicates Economy and Real Estate Back on Track

In an April survey of NAIOP Forum members, the general consensus is “the future is now” or more accurately, on the horizon. The majority believe the United States economy has turned the corner and is on the road to a sustainable recovery. This perception is fairly widespread, although the outlook is tempered by the realization that the economy faces a number of challenges both domestically and globally that pose some downside risk.

Development Potential graph

Despite recognizing these risks, many real estate professionals believe that the improving economy is setting the stage for a gradual, somewhat lagged recovery in the commercial real estate market. At the same time, they are reporting moderate improvements in capital market conditions and capital flows which are helping the real estate market gain some traction as evidenced by increasing transaction volume, capital flows and underlying market conditions. This generally positive outlook is being evidenced by a growing sense of optimism surround­ing the prospects for development, although such enthusiasm is appro­priately tempered. It is expected that economic conditions will continue to improve overall. However, before the real estate market benefits from a broad-based recovery, we will have to have job growth, a new round of business investment and ultimately consumer spending. Even when that occurs, the industry will be characterized by more discipline and greater reliance on analytics than in the re­cent past, which will pose some short-term challenges that will have to be overcome but will translate to a more stable market over the long-term.  

Local Markets graph

The NAIOP Confidence survey was developed in collaboration with NAIOP Corporate staff as well as an ad hoc advisory committee. The com­mittee helped develop four key areas for the survey to address: economic conditions, capital markets, real estate industry outlook and trends.

The survey results suggest the indus­try will ultimately emerge in a more disciplined and sustainable manner. So, the future is getting closer.

 

From the Archives: Perspectives Articles from the Previous Issue

Alex Klatskin

At Closing - A Welcome and Long-Awaited Return to Optimism 

NAIOP Chairman’s Perspective - The beginning of 2011 is giving us new hope that the commercial real estate market, which has been limping back from a terrible fall, might actually get into a full stride quite soon.

Young people networking

New Voices - Developers Leaders’ Upbeat About 2011 

Developing Leader members were surveyed in January 2011 to gauge their outlook on the year ahead and their thoughts on what’s in store for the commercial real estate industry. Areas addressed in the survey included hot topics, networking opportunities, development potential, education interest and future outlook.