In a Twitter discussion yesterday, NAR director of commercial research George Ratiu (pictured) and experts from the Inland Group found that the stabilizing US economy, reduced commercial real estate inventory and amplified demand are the main drivers of increased transaction volume and value. When asked why commercial real estate in particular is doing so well, Ratiu and Inland said overseas investors seeking stable assets are partly responsible for the trend, with Ratiu adding that Manhattan, LA, Chicago, Dallas and Atlanta recorded the highest commercial real estate sale volumes in 2015. But secondary and tertiary markets—such as Orlando, Palm Beach, St. Louis, DC’s Virginia suburbs and Raleigh/Durham—have experienced faster growth in the last 18 months.

Overall, Ratiu says that 2015 is performing stronger than expected, with multifamily and commercial real estate poised to keep growing as rents rise and vacancies decline. New jobs from Millennials and the rise of e-commerce will also significantly raise demand. But any aggressive rise in interest rates, Inland notes, could present a huge threat, and some are worried that rents are rising too fast. While both Ratiu and Inland agreed that rents continue to be a problem, the Fed’s raise in rates would most likely gradual and have minimal impact. [GS]