The employment market consistently signaled steady economic growth last year despite numerous unanticipated events that could have upended the expansion.  Additionally, the tightening labor market achieved accelerated wage growth as average wage growth jumped 2.9 percent since last December.

Unforeseen events tap the brakes of the investment market.  The unanticipated results of the presidential election sparked a shift in several macro-level dynamics that have begun to ripple through the commercial real estate market.

Job creation still supporting positive outlook; robust delivery schedule weighs on vacancy and rent growth.  New jobs are consistently being created in the New York City economy, even as the pace of hiring has slowed over the past year.  As a result, demand for local housing has remained high, particularly in the core areas of Manhattan and Brooklyn where mortgage payments are far above rental rates.  As a result, multifamily development has risen to a… Read More

The December 2016 rate increase creates mixed signal for investors.

Following the lengthy campaign, Donald Trump surprised pundits and pollsters by winning the presidential election.  This unanticipated turn of events set off a rapid drop in both stock market and Treasury rate futures before they recovered early Wednesday morning.  In the wake of this unexpected outcome, markets are repricing both debt and equity to factor in increased government infrastructure and defense spending as well as the prospects of higher inflation.  Sentiment is fragile and volatility… Read More

Vacancies tighten in the Third Quarter despite elevated completions and investors broaden their acquisition criteria.

Commercial mortgage-backed security (CMBS) financing slowed dramatically in the first half of 2016 as volatility roiled the debt markets.  In addition, new rules governing CMBS issuance that take effect at the end of this year also created uncertainty in the marketplace.

Hiring in September reaffirmed that job creation is moderating from the elevated levels of the past two years.  Accelerated wage gains offer some evidence that employers are competing vigorously to fill positions, an action that could intensify inflation pressures in the coming year.

Foreign demand for U.S. commercial real estate elevated.  Global financial market volatility, weak foreign economies, low alternative investment yields and a variety of factors creating uncertainty have reinforced the advantages of direct investment in U.S. commercial real estate.

Modest payroll growth last month reaffirms the sound state of the U.S. labor market and raises questions regarding whether the Federal Reserve needs to raise its benchmark interest rate when it meets later this month.