Cushman & Wakefield released its latest US Macro Forecast, confirming the first half of 2016 put the economy through some rough headwinds. Despite that, consumer confidence, job growth, low interest rates and consumer spending remain intact. Below are the implications Cushman & Wakefield predicts for the commercial real estate sector:

Office

Slowing job growth will bring on a gradual decline in office space demand while net absorption is projected to hit just over 60M SF, down from 81.1M SF in 2015. Rent growth will climb to its highest point in the cycle this year, growing at 5.5%, while increased construction over the next two years will drive rent growth down to 4.8% in 2017.

Industrial

E-commerce's continued dominance will keep boosting warehouses and distribution space while flex/R&D space is expected to benefit from gains in tech employment. US industrial net absorption is forecast to blow past 250M SF, beating last year's record pace of 246M SF, as the vacancy rate tightens to 5.8% this year before expanding to 6% in 2017.

Retail

As is often the case, Class-A properties will have the most demand, the lowest vacancy levels and the strongest rent growth. Vacancy rates are expected to decline from 8% in 2015 to 7.3% in 2017 as the market experiences over 65M SF of net absorption in the next two years. While rent growth projections have dampened, rents are still expected to grow by at least 4.6% this year.

Transaction Volume

Total sales volumes across all property types, including land sales, will decrease up to 20% from last year. Sales volume is expected to total $449.6B, putting it on par with sales from 2006 and 2014, while apartment sales are the most robust this year. The hardest hit were sales of land for development sites, warehouses and hotels.