WASHINGTON, June 1 /PRNewswire/ -- There are strong indications that the U.S. economy has entered into the next cycle of expansion, according to a the Mid-Year National Forecast released today by Cassidy Turley, a leading commercial real estate services provider in the U.S.
In April 2010, the national economy created 290,000 new jobs – a monthly gain that rivals some of the strongest employment growth during the technology boom of the late 1990s and the real estate boom of 2003 to 2007. As of April 2010, there have been 44,000 new manufacturing jobs created, suggesting the industrial employment base will continue to grow in the coming months.
"The trend in demand for office space is headed in a positive direction, as evidenced by the fact that declines have decelerated rapidly for four straight quarters," said Kevin Thorpe, Chief Economist at Cassidy Turley. "With little new supply in the pipeline, we expect vacancy to stabilize in 2011."
According to Cassidy Turley, the combination of still-tight lending conditions and weakened property fundamentals resulting from the recession will continue to constrain sales activity in 2010, although the overall volume will be slightly higher than in 2009. 2011 is projected to be a strong rebound year for both industrial and office sales.
Thorpe continued, "There is one indicator preventing us from calling this a full fledged recovery - persistently low consumer confidence. We cannot rule out the small possibility of a double-dip scenario until the Consumer Confidence Index achieves a level of greater than 80, and as of May 2010, the index registered at 63.3."
Through April 2010, national office sales volume has totaled just $5.1 billion and industrial volume totaled $2.9 billion, compared to $55.4 billion and $15.5 billion, respectively, which occurred from the Jan-Apr period during the peak year of 2007. Looking one layer deeper, investment sales remain a tale of two markets: core vs. value-add.
The report also finds that cap rates will continue to tighten for core markets, but with a greater share of value-add transactions in the mix, expecting the overall cap rate for both office and industrial properties to rise in 2011.
"A sustainable period of job creation is required before occupancy levels make value-add attractive again; that is not likely to happen until 2011," continued Thorpe. "Quality real estate in top tier markets is leading, and will continue to lead the recovery in commercial real estate, with secondary markets following suit in 2011 and more so in 2012."
A full copy of Cassidy Turley's Mid-Year National Forecast Report can be accessed by visiting:
About Cassidy Turley
Cassidy Turley is a leading commercial real estate services provider in the U.S., with 420 million square feet of managed space, 58 locations across 19 national markets, and $13 billion in completed transactions for 2009. Outside of North America, Cassidy Turley partners with GVA Grimley, the founder and majority shareholder of GVA Worldwide. Through its diverse team of experienced professionals, Cassidy Turley focuses on the needs of its clients, offering end-to-end services delivered across a full spectrum of commercial real estate including Capital Markets, Corporate Services (which supports more than 25,000 locations), Landlord and Tenant Representation and Property and Project Management. The firm also offers specialty services and industry focused practice groups as well as world class market research. In addition, Cassidy Turley is a leader in assisting clients to create more sustainable workplace environments. The firm recently ranked in the Top 10 on the Lipsey Co.'s Commercial Real Estate Top Brands Survey. Please visit www.cassidyturley.com for more information about the company.
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