{"id":1004741703,"date":"2024-12-23T10:10:04","date_gmt":"2024-12-23T18:10:04","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004741703"},"modified":"2025-01-16T06:07:45","modified_gmt":"2025-01-16T14:07:45","slug":"rclco-market-index-points-to-optimism-for-2025","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/rclco-market-index-points-to-optimism-for-2025\/","title":{"rendered":"RCLCO Market Index Points to Optimism for 2025"},"content":{"rendered":"\n

Commercial real estate investment sentiment has risen convincingly in the second half of the year, according to RCLCO\u2019s real estate market index, which registered a 25 percent increase.<\/p>\n\n\n\n

After sputtering for the past few years, it’s now at 65, solidly into recovery territory. An RMI above 60 is typically indicative of positive or improving market conditions.<\/p>\n\n\n\n

Some 68 percent of this survey of highly experienced real estate professionals from across the country and the industry have worked in the real estate industry for 20 years or more, with an average respondent tenure of approximately 25 years; and 82 percent of respondents are C-suite or senior executives in their organizations.<\/p>\n\n\n\n

\"Chart<\/a>
RCLCO national real estate market index from mid-2011 through year-end 2024. Chart courtesy RCLCO<\/em><\/figcaption><\/figure>\n\n\n\n

Even more, the RMI is forecast to increase to 82 over the next 12 months. More than half (54 percent) credit the incoming Trump Administration for their favorable view.<\/p>\n\n\n\n

Niche sectors\u2014such as self storage, industrial, grocery\/necessity retail\u2014are likely to show resilience, having overcome downturn conditions this cycle.<\/p>\n\n\n\n

\u201cA renewed sense of optimism is apparent across all aspects of commercial real estate, including multifamily, industrial, retail and office,\u201d Michael Romer, co-founding partner, Romer Debbas, told Commercial Property Executive<\/em>.<\/p>\n\n\n\n

\u201cYou can actually see the smiles again at holiday parties. There\u2019s optimism for 2025.\u201d<\/p>\n\n\n\n

America was built on big dreams and self-belief, and that has returned, according to Kyle Gulock, founder & managing partner at Century Partners.<\/p>\n\n\n\n

\u201cOnce the new policy is in place, we expect a swift uptick in overall investment [at least] until the middle part of the year,\u201d he said.<\/p>\n\n\n\n

Trump policies are \u2018a wild card\u2019<\/h2>\n\n\n\n

President-elect Trump\u2019s second term throws a potential wild card into the outlook, according to Kevin Thorpe, global chief economist, Cushman & Wakefield.<\/p>\n\n\n\n

\u201cThe policy changes encompass a wide range of macroeconomic influences, including regulatory conditions, fiscal policies such as taxation and government spending, trade policies and immigration policies,\u201d Thorpe said.<\/p>\n\n\n\n

Many policies the Trump administration is pursuing in his second term\u2014such as restrictive immigration, tariffs and tax cuts\u2014mirror the same pursued during his first term and, despite the whipsaw in policy, the U.S. property sector performed well, Thorpe observed.<\/p>\n\n\n\n

\n\n\n\n

READ ALSO<\/strong>: Is This the Start of CRE\u2019s New Growth Cycle?<\/a><\/p>\n\n\n\n

\n\n\n\n

He added that some of these policies will have a more immediate impact, for example, on the financial markets. Others have a more lagged impact on the economy and financial markets and are, therefore, more likely to influence leasing fundamentals and the capital markets down the road.<\/p>\n\n\n\n

\u201cAlthough many of the changes to policy could be significant, they also have the potential to exert offsetting forces to economic growth and inflation,\u201d Thorpe said. \u201cOur baseline assumes that the expected changes in policy will not significantly alter the trajectory of the economy or the property sectors\u2019 performance in 2025.\u201d<\/p>\n\n\n\n

\"Chart<\/a>
More than half (54 percent) credit the incoming Trump Administration for their favorable view. Chart courtesy RCLCO<\/em><\/figcaption><\/figure>\n\n\n\n

The Federal Reserve\u2019s 50-basis-point rate cut in September 2024 spurred transaction activity in the real estate sector, Robert Martinek, director at EisnerAmper, told CPE<\/em>.<\/p>\n\n\n\n

\u201cMany felt this confidence has continued with additional 25-basis-point cuts<\/a> in November and December,\u201d he said. \u201cMany market participants feel that Trump has \u2018business-first\u2019 policies and he will cut red tape and expand business opportunities.<\/p>\n\n\n\n

\u201cFor healthy sectors of the market (multifamily and industrial), most of the new construction that entered the market has been absorbed. With new and planned development expected to slow, vacancy rates will move lower while rental rates should increase.\u201d<\/p>\n\n\n\n

Outlook for 2025<\/h2>\n\n\n\n

Looking to next year, regarding retail, rising insurance costs, construction pricing, debt and equity, and the financing and refinancing landscapes affect the trading volume, according to Meghann Martindale, principal & director, market intelligence, retail at Avison Young.<\/p>\n\n\n\n

\u201cRenewed port negotiations or strikes could also impact the movement of goods, prices and retailer operations. And it is yet to be seen whether consumer spending can remain resilient\u2014although tariffs may trigger renewed inflation pressure, U.S. consumers have not stopped spending through recent inflation and rising interest rates, so tariffs may not deter spending to the levels some are fearing.\u201d<\/p>\n\n\n\n

As for energy, Howard Huang, analyst, market intelligence, data centers at Avison Young, told CPE<\/em> that the incoming administration has expressed support for nuclear energy development. \u201cIf realized, this policy could significantly enhance energy availability in the U.S., benefiting the growth of data centers and other industries reliant on stable power infrastructure.\u201d<\/p>\n\n\n\n

\"Chart<\/a>
RCLCO real estate cycle chart. Chart courtesy RCLCO<\/em><\/figcaption><\/figure>\n\n\n\n

Across office, industrial and retail, Garett Bjorkman, co-chief executive officer at PEG Cos., said he anticipates positive trends and continued flight to quality for new office leasing, and older vintage product being converted to alternative uses such as residential and hospitality.<\/p>\n\n\n\n

\u201cGiven the strength of consumer spending, we expect retail to continue improving, which will, in turn, lead to more industrial and logistics demand,\u201d Bjorkman said.<\/p>\n","protected":false},"excerpt":{"rendered":"

A majority of survey participants expect improving conditions across property sectors.<\/p>\n","protected":false},"author":3568,"featured_media":1004741799,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21748,21783,23891,21742,21747,21749,51037],"tags":[33022,32799,37703,36905,36925],"class_list":["post-1004741703","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industrial","category-investment","category-national","category-latest","category-office","category-retail","category-trends","tag-avison-young","tag-cushman-wakefield","tag-eisneramper-llp","tag-rclco","tag-romer-debbas"],"acf":[],"yoast_head":"\nRCLCO Market Index Points to Optimism for 2025 - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Commercial real estate investment sentiment has risen convincingly in the second half of 2024, according to RCLCO\u2019s real estate market index.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/rclco-market-index-points-to-optimism-for-2025\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"RCLCO Market Index Points to Optimism for 2025\" \/>\n<meta property=\"og:description\" content=\"Commercial real estate investment sentiment has risen convincingly in the second half of 2024, according to RCLCO\u2019s real estate market index.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/rclco-market-index-points-to-optimism-for-2025\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2024-12-23T18:10:04+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-01-16T14:07:45+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/12\/RCLCO_Market_Index_Feature.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Richard Berger\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/rclco-market-index-points-to-optimism-for-2025\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/rclco-market-index-points-to-optimism-for-2025\/\",\"name\":\"RCLCO Market Index Points to Optimism for 2025 - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/rclco-market-index-points-to-optimism-for-2025\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/rclco-market-index-points-to-optimism-for-2025\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/12\/RCLCO_Market_Index_Feature.jpg\",\"datePublished\":\"2024-12-23T18:10:04+00:00\",\"dateModified\":\"2025-01-16T14:07:45+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/6d4c5f1b2f682b3604ad9fe73c19fed7\"},\"description\":\"Commercial real estate investment sentiment has risen convincingly in the second half of 2024, according to RCLCO\u2019s real estate market index.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/rclco-market-index-points-to-optimism-for-2025\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/rclco-market-index-points-to-optimism-for-2025\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/rclco-market-index-points-to-optimism-for-2025\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/12\/RCLCO_Market_Index_Feature.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/12\/RCLCO_Market_Index_Feature.jpg\",\"width\":800,\"height\":620,\"caption\":\"RCLCO national real estate market index. 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