by Dan Rafter
Top real estate executives expect a stronger commercial real estate market in 2014. That’s the good news, and the most important takeaway, from the 2014 Akerman Real Estate Industry Outlook Survey.
The survey, conducted every year by national law firm Akerman LLP, measures the confidence in the commercial real estate industry exhibited by top real estate chief executive officers, chief operating officers and other industry executives.
And this year’s report is a positive one, with 70 percent of respondents stating that they had a more optimistic outlook about the 2014 CRE market than they had about the market in 2013.
What’s behind this optimism? The national economy continues to recover. A total of 60 percent of survey respondents said that job creation in 2014 wll either be marginally or significantly stronger than in 2013.
Of course, these top real estate executives are realistic. They also admitted that there is still uncertainty in the CRE market. More than half of survey respondents — 52 percent — pointed to government policies and Congressional gridlock as the primary reasons for this uncertainty.
What issues are CRE executives worried most about? The survey for the third straight year found that executives listed U.S. policies, availability of credit and refinancing challenges as the most pressing issues facing the U.S. commercial real estate industry.
The survey also addressed funding sources, with real estate executives predicting that the three leading sources of real estate debt and/or equity funding will come from private equity sources, REITs and banks. Private equity has replaced banks on this year’s survey as the predicted leader.
To few people’s surprise, survey respondents predicted that the multi-family sector will be the most active CRE sector this year. They survey respondents added that the industrial sector will see the largest increase in activity in 2014.
Executives predicted that the industrial sector will be the second most active CRE segment in 2014, followed by retail, hospitality and office.