Fed Beige Book: Commercial RE Expands Further Across US
The Federal Reserve’s Beige Book, the published-six-times-yearly compendium of anecdotes from every corner of the economy, issued its newest edition yesterday. Within, we learn the commercial real estate market, viewed from a national perspective, is showing good signs – expansion in transactions and construction plus rising rents characterize many of the Fed’s twelve districts.
Commercial real estate activity expanded further in most Districts. Construction and sales rose only slightly in Boston, Kansas City, and St. Louis but grew at a faster clip in Cleveland and Dallas. In the Atlanta District, construction activity expanded moderately, but contractors reported tight supply conditions, with construction backlogs of one to two years. Contacts in Richmond and New York noted strong growth in industrial construction, and vacancy rates for industrial space fell to 10-year lows in the latter District. Commercial leasing activity strengthened in New York, Richmond, and San Francisco, but grew at a softer pace in Philadelphia, where contacts described the market as in a “lull, not a retreat.” Vacancy rates on commercial properties increased along with completions in the Kansas City District. Commercial rents edged up in various Districts, including in Dallas and San Francisco. Contacts in several Districts cited only modest expectations for sales and construction activity moving forward, due in part to economic uncertainty surrounding the November elections.
While not a commentary on the views of Fed officials, the Beige Book nonetheless provides a handy barometer for regional and national economic activity ranging from commercial real estate to finance, consumer spending, tourism and other major areas.
Get a copy of the entire Fed Beige Book for September 7, 2016 at this link.