Dr. Peter Linneman, Sam Zell and Jay Olshonsky.
The outlook for the commercial real estate market appears stronger in the US than the rest of the world. That was the shared consensus between Sam Zell, Chairman of Equity Group International and Dr. Peter Linneman, NAI Global Chief Economist. The two renowned real estate experts were featured on a panel discussion in Chicago this week at the annual NAI Global Market Outlook. Over 550 individuals from NAI Global Member firms and their clients attended the event.
Sam Zell is a legendary industry visionary, and we are honored that he was able to participate in our Global Market Outlook. We are proud to offer our Members and their clients access to this level of industry insight.
The presentation looked at factors driving the commercial real estate market, including significant availability of capital, geopolitical unease, interest rates, demographic changes and overall demand for space. Linneman anticipates three to four more years of growth. He noted that debt capital is flowing, and demand for space is up with supply picking up but still lagging. Zell’s outlook was less optimistic, although he did acknowledge the state of the market is better than it was earlier in the economic recovery. Zell stated that he doesn’t “remember a period when there were so many black swans,” citing geopolitical events in the Middle East and Ukraine that could affect the global economy.
Technology has been the biggest driver of growth in the office sector. “Technology businesses are thriving on the availability of capital,” said Zell. Both Linneman and Zell wonder if a decreased demand for space in the technology sector would tip the US real estate markets. Zell pointed to other aspects of technology that could have on the commercial real estate market overall, including increased applications of Artificial Intelligence, which he said “is moving not slowly but exponentially” and that the impact is yet undetermined.
International investing in the US commercial real estate market is happening but Zell believes it is dramatically less than recent headlines would suggest, and that the market is not being driven by foreign capital. He said that it is playing a role in the US, but it has done that since the country was founded. He said the US needs to go back to a focus on growth and for years the country had a perpetual growth rate.
About NAI Global
NAI Global is the single largest, most powerful global network of owner-operated commercial real estate brokerage firms. NAI Global provides a full range of corporate real estate services, including brokerage and leasing, property and facilities management, real estate investment and capital market services, due diligence, global supply chain and logistics consulting and related advisory services. NAI Global Member firms, leaders in their local markets, are actively managed to work in unison and provide clients with exceptional solutions to their commercial real estate needs. Founded in 1978, today NAI Global has more than 375 offices strategically located throughout North America, Latin America, Europe and Asia Pacific, with over 6,700 local market professionals, managing over 380 million square feet of property. Supported by the central resources of the NAI Global network, Member firms deliver market-leading services locally and combine their in-market strengths to form a powerful bond of insights and execution for clients with multi-market challenges.
NAI Global was acquired in 2012 by C-III Capital Partners, a leading commercial real estate services company engaged in a broad range of activities, including primary and special loan servicing, loan origination, fund management, CDO management, principal investment, online capital markets, title services and multifamily property management. C-III’s principal place of business is located in Irving, TX, with additional offices in New York, NY, Greenville, SC and Nashville, TN.
To learn more, visit www.naiglobal.com.