ULI Forecast Predicts Moderate Growth for Economy, CRE

The U.S. economy and CRE industry are, in general, expected to experience moderate growth through much of 2019, according to a new three-year economic forecast from the Urban Land Institute’s (ULI) Center for Capital Markets and Real Estate.

Eight ULI report projections:

  • Relative high, but moderating CRE volumes, declining from $489 billion in 2016 to $450 billion in 2017 and 2018, and slipping to $430 billion in 2019
  • Continued commercial price appreciation, 5% in 2017, 3.5% in 2018 and 3% in 2019, all below the long-term average growth rate of 5.7%
  • Rent growth ranges from 4.6% for industrial to 2% for apartments
  • Positive returns, but at lower rates… 2017 returns expected to range from 9.8% for industrial, to 6% for both office and apartments
  • Relatively stable vacancy/occupancy rates for all CRE sectors
  • Continued growth in single-family housing starts, projected to increase from 781,500 units in 2016 to 920,000 units in 2019
  • Healthy GDP growth
  • Moderating employment growth

The latest ULI Real Estate Consensus Forecast is based on a survey of 53 of the industry’s top economists and analysts representing 39 of the country’s leading real estate investment, advisory, and research firms and organizations.