UNITED STATES - A forecast from Lawrence Yun, chief economist with the National Association of Realtors, predicts commercial property investments in the U.S. will reach $420 billion in 2015.
However, the property market has a ways to go to get back to the $571 billion in annual investments made in 2007 before the recession hit.
“We turned the corner about 12 to 18 months ago,” said Yun. “For 2014 we anticipate about $400 billion of commercial real estate activity — still short of 2006 or 2007 levels.”
The economic downturn sharply reduced commercial property market investments to only about $67 billion in 2009.
“When the great recession occurred, credit froze,” Yun said. “There was a bout a 90 percent reduction in business activity for the commercial sector.”
Now the market is recovering with commercial property activity and prices getting back closer to previous peak levels as the overall economy grows, according to Yun.
States with the biggest employment increases are seeing the best commercial real estate activity.
“Some states are doing much better than others,” Yun said. “The state of Texas is consistently in the top five.”