HOUSTON, Nov. 13, 2014 /PRNewswire/ -- The U.S. economy is holding steady despite market-wide fears of a global slowdown, according to the November edition of "the BRIEFING," a report compiled by Transwestern. Europe and Asia continue to struggle, and unless the European Union and European Central Bank move quickly to stimulate their economies, the U.S. could be dragged into a similar slowdown next year. The combination of the Federal Reserve allaying fears of imminent interest rate increases, the strong dollar and flight to safety/quality will likely drive interest rates back to historic lows.
Consumers seem to be modestly stepping up consumption as steady job growth increases wages. U.S. production strongly rebounded 1 percent in September, compared to a 0.2 percent decline in August, and the average factory work week reached its highest production level since World War II. Additionally, crude oil prices dropped more than 20 percent.
While 10-year Treasury yields dropped 30 basis points to 1.86 percent before rebounding to just over 2.0 percent, this is more indicative of a panic rather than a market rally. In fact, the VIX Volatility Index has more than doubled recently from 12 to 26, indicating more fear among stock and bond investors.
Commercial real estate should perform well in this environment as it provides relatively high yields, income protection with longer leases and the security of hard assets in times of uncertainty. The nation's weakest malls continue to struggle as anchor tenants JCPenney and Sears close stores nationwide.
More information can be found in Transwestern's November issue of "the BRIEFING," a monthly publication analyzing the national economy, capital markets and commercial real estate. Download the full report here: twurls.com/briefing1114
"The BRIEFING" is an aggregation by Tom McNearney, Transwestern's chief investment officer, of other articles and reports. McNearney leads Transwestern's capital market efforts for development and investment nationwide. McNearney also serves on the firm's investment committee and board of directors, and he directs the execution and expansion of the firm's principal investment activities across the country.
Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. As a member of the Transwestern family of companies, the firm capitalizes on market insights and operational expertise of independent affiliates specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 180 offices in 38 countries as part of a strategic alliance with Paris-based BNP Paribas Real Estate. For more information, please visit transwestern.com and follow us on Twitter: @Transwestern.