CRE Roundtable: Room for Improvement as Market Moves Forward

The Real Estate Roundtable’s latest quarterly Sentiment Survey has some good news for CRE owners and investors: U.S. commercial real estate markets continue their gradual recovery from recession—as reflected by improving fundamentals, transaction volumes, and capital flows—and will probably remain on a modestly upward trajectory over the coming year.

Still, senior industry executives are reserved about prospects for a sustainable economic recovery. Various policy risks continue to weigh on real estate markets. These include the scheduled sunset of the Terrorism Risk Insurance Act (TRIA), which could spark a job-killing commercial real estate credit crunch; tax reforms that could cause major dislocation in real estate markets; and the economic conditions surrounding future interest rate hikes, which could put renewed pressure on valuations, complicate loan refinancing, and impede debt servicing.

“The slight uptick in our latest Sentiment Index shows our industry on a generally positive path—in keeping with broader macroeconomic trends—yet still not fully recovered, and still subject to policy-related risks,” said Roundtable Chairman Robert S. Taubman, who is chairman, president, and CEO of Michigan-based Taubman Centers Inc. “U.S. policymakers must work to create a more attractive climate for job creation and investment as these are critical to real estate’s health—and as real estate goes, so goes the economy,” added Taubman, whose firm owns an international portfolio of regional and super-regional malls.

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