The commercial real estate market in the U.S. appears set for an uptick in 2012, but don't expect a headline-making rise. According to recent research from ""Jones Lang LaSalle"":www.joneslanglasalle.com/, economic indicators are pointing to a modest improvement in the commercial segment, and data from the company also reveals that rumors of a double dip in the sector during the coming year were premature.[IMAGE]
Highlights from Jones Lang LaSalle's ""2012 National Commercial Real Estate Outlook"":http://www.us.am.joneslanglasalle.com/UnitedStates/EN-US/Pages/Research.aspx included predictions tallying transaction volume and movement in the hospitality realm. Numbers from the survey call for an increase in total transaction volume of 15 to 20 percent, and the company's statistics forecast an estimated $190 billion in volume for 2012.
Commenting on the new data, Jones Lang LaSalle's managing director of research for the Americas, Ben Breslau, said, ""Total investment transaction volume in office, industrial, retail and multifamily will increase by a projected 15-20 percent over the├âÔÇÜ├é┬á2011 forecast total of more than $160 billion, which in itself will represent an approximately 44 percent increase over total volumes in 2010.""[COLUMN_BREAK]
Businesses' future investment interest in the commercial segment also played a role in Jones Lang LaSalle's evaluation, and the entity noted that it's likely that businesses around the country will put strong consideration toward commercial real estate during the year ahead, as they focus on investments that are efficient and productive. Additionally, Jones Lang LaSalle noted in a company statement about the report that ""businesses will consider corporate real estate as a greater contributor to corporate social responsibility initiatives in 2012, shifting investments from new construction toward retrofitting existing assets.""
The survey addressed global uncertainty, slow employment growth, and changes in the marketplace as important catalysts in driving down the demand for office space. However, Jones Lang LaSalle identified specific areas around the U.S. that seem likely to go against the trend, stating, ""Commodity- and technology-rich markets, such as Texas, Denver and Northern California will lead demand growth.""
In the hotel and resort segment, demand is expected to continue its recent increases during 2012, but the company mentioned that the pace of the trajectory will be more ""cautious."" Jones Lang LaSalle's results also showed that private equity groups will be at the forefront of asset bidding in the commercial hospitality arena.
Continuing his statements on Jones Lang LaSalle's findings, Breslau added, ""Given concerns in Europe and in some emerging markets, we anticipate the United States recovery to be comparably stable in 2012, though the overall growth trajectory will remain modest. Debt financing will remain available for core real estate, and we expect the current slowdown in commercial mortgage-backed securities will be relatively short-lived, though the recovery in CMBS volumes will be choppy and will take time.""