Slow, But Steady

The U.S. economy is now midway through its fourth year of recovery.  Ignoring any occasional stock market euphoria, the economy remains on a constant path of slow improvement.  Real gross domestic product is on track to grow at a rate of around 2% this year, which is roughly the same growth rate observed in the previous three years of this recovery.

Although 2% GDP growth has been enough to allow occupancy levels to slowly improve in most property markets, it remains sub par to the growth rate required for widespread asset appreciation.  Beyond a few standout segments, such as trophy assets, landlords generally continue to fight fiercely for a thin line of tenant prospects.  Even at this maturing stage of the recovery, commercial real estate largely remains a market characterized by clear winners and clear losers.

Robert Schmitz
Robert A. Schmitz Corporate Real Estate Advisors