Research experts at ""Jones Lang LaSalle"":http://www.us.jll.com/united-states/en-us (JLL) expect ""a clear path to stronger performance"" for commercial real estate (CRE) in 2014.[IMAGE]
Reviewing what they call ""surprising upsides"" in investment sales volume over the last year, JLL's top researchers say they expect the factors driving 2013's growth--an improving lender environment, heightened risk appetite, and the arrival of investors in secondary markets--are expected to continue to move the sector forward.
Overall, JLL expects global investment volume growth of 10 percent to $550 billion in 2014, with ""particularly strong gains on the U.S. horizon with further gains in more diversified investment across primary and secondary markets and sectors.""
""We're seeing a tremendous weight of capital from a growing and diverse set of capital sources interested in a much wider range of U.S. real estate,"" said Ben Breslau, JLL's Americas Research Managing Director. ""Investors feel more comfortable with the economic outlook, and they've shown a greater appetite for risk that has led to a 21 percent global increase in year-over-year investment volumes.""
While there are a few other factors impacting CRE movements over the next 12 months, in JLL's view, ""[i]t all comes down to jobs,"" especially now that many industries are coming back from their recessionary losses.
""Every new job in a given sector and region produces or typically correlates highly, with other jobs being created in other sectors in that region. These jobs are known collectively as indirect jobs,"" the researchers explain. ""These jobs in turn have a multiplier effect and thus create additional demand for real estate.""
Housing is also a bright spot, as it impacts multiple facets of the economy, says Marisha Clinton, director of Capital Markets Research.
""Accelerated housing flows through to commercial property, as construction, real estate, lending, retail and manufacturing jobs are created boosting local economies,"" she said. ""However, the Millenials are the ones to watch, creating broad-reaching implications for our culture and economy that will have significant impact for years to come.""