Development 14: Everything is Awesome – Right?
With Q2 GDP just revised upward from 4.2% to 4.6% after -2.1% in Q1, and all commercial real estate credit metrics in the best condition they have been in since before the Financial Crisis, it would appear that “Everything is Awesome.” However, there are some risks ahead.
- What will the FED do with regard to interest rates after it ends its Quantitative Easing bond buying program in October?
- Do higher interest rates necessarily mean higher Cap Rates and less credit for commercial real estate?
- Multifamily Starts and new industrial warehouse construction have risen dramatically in the past 12-24 months. Are we facing overbuilding risk again in commercial real estate, or have we just forgotten what leading demand metrics to monitor, such as the Net Absorption to New Supply ratio?
- And finally, what is the driving force behind today’s growth and commercial real estate development? It might be something 3D.
This session concluded with an examination of how the U.S. is remaking its supply-chain and how 3D printing may be the technology that most impacts commercial real estate in the next decade.
K.C. Conway, Senior Vice President, SunTrust Bank
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