We’ve got another go-to guru: Cassidy Turley’s Chief Economist, Kevin Thorpe, who, riffing on his profession’s penchant for sometimes getting it wrong, provided this symbolic selfie. His view on the national economy: It’s off and running, as is commercial real estate in most markets. Private sector performance at a 4% growth rate is stronger than during the last real estate boom in 2004-7. With government factored in, he's projecting a GDP growth of 3.3% this year. Fun fact: Kevin says that every 50 basis points GDP is higher than the norm (currently 2.5%) adds 7M SF of additional demand for office space and 10M SF for industrial.
Now he gets that photo right—just like economists issue “corrected” data. As for the DC region, Kevin says federal employment has stabilized and contributed positively to economic growth in Q3, for the first time in three years. The number of government contracts being awarded has risen, multifamily will set a record for absorption, and office sales volume is back to ‘07 levels. On a consumer level, he adds, restaurants and malls are packed, retail is booming, tourism is surging, and traffic remains a nightmare. CRE pain is concentrated in office leasing, but when all is said and done, DC will retain its status as a top five real estate market. In sum, he expects 2015 local GDP will be up 2%; 2016 up 2.6%; 2017 3% (as office vacancy comes down meaningfully); and in 2018 we return to normal. But he reserves the right to correct that data in a few years.
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