Cushman & Wakefield’s US Macro Forecast, released today, points to a strong last half of 2016, as strong market fundamentals overtake the early-year turbulence.
“The US economy and property markets are starting to fire up again as fears of a stalled expansion diminish,” said Kevin Thorpe (pictured), Cushman's chief economist.
Cushman says a largely positive labor market will continue to drive strong absorption in industrial—although less than the record levels in 2014 and 2015—leading to a 5.9% overall vacancy rate, some of the best conditions ever seen in the sector.
Despite the strong labor market outlook, Rebecca Rockey, C&W's Head of Americas forecasting, tells Bisnow that a slight hiring slowdown will see net office absorption decrease from 82M SF in 2015 (a cyclical peak) to 67.8M SF in 2017.
"[Absorption] is still going to be very strong," Rebecca tells us, "but it's just going to be a little less than the peak, which has been the last year or two for the office and industrial sectors."
The report says expects the retail sector to see continuing a focus on Class A and new product, with most rent growth in the first half of 2016, due to the recent waves of store closings—some of the most recent being Aeropostale's 154 store closings, and Sports Authorty's coming selloffs.
Overall, Cushman expects capital markets activity to increase in 2016, growing 6.9% from 2015 to a record level of $580.4B, as dovish foreign monetary policy, foreign flight to US quality assets and growing levels of untapped cash drive demand for commercial real estate investment.
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