by Ann Withanee — March 28, 2011—With signs of a strengthening U.S. economy evident in declining initial jobless claims, rising business and consumer confidence, and growing employment figures, the PwC Real Estate Barometer, a new feature in the just-released first quarter 2011 PwC Real Estate Investor Survey, indicates that the fundamentals of the commercial real estate industry are slowly improving and supports the consensus among surveyed investors that the industry is moving past the bottom of the cycle.
The barometer tracks the anticipated performances of the four main property sectors (office, retail, industrial, and multifamily) from 2011 to 2014. By analyzing historical and forecast stock data, the barometer measures how the inventory of each sector changes over time in relation to the four stages of the real estate cycle contraction, expansion, recession, and recovery. In addition, barometer analyses are prepared for various geographic regions and specific metro areas.
According to the barometer, the majority of office stock will be in recovery by year-end 2011 due to a lack of new supply and signs of decreasing vacancy for the U.S. office market.
For the retail market, inconsistent consumer spending and inflationary fears will keep the majority of retail stock (76.6 percent) in recession through 2012. A recovery will materialize by year-end 2013, with 77.1 percent of retail inventory in that phase. Availability rates for the U.S. industrial sector are expected to peak in 2011 as tenant demand strengthens on the heels of a growing economy. As a result, the bulk of industrial stock will be in recovery in 2011 and 2012 (71.8 and 86.2 percent, respectively).
For more information, visit the PwC Web site.
