NEW YORK CITY-Cautious optimism might be the best way to describe the outlook of two industry analysts who spoke Tuesday on the topic of “Global Real Estate Trends in 2013” during a meeting of the New York Commercial Real Estate Women’s Network, Inc.

The presenters—Jonathan Woloshin, co-head of sector research at UBS, which hosted the meeting, and Dennis Yeskey, founder/managing director of Yeskey Real Estate Consulting & Investments—each laid out a forecast for modest growth and a general healthiness across commercial real estate in 2013; albeit in their own way.

“Commercial real estate is in a sweet spot right now,” Yeskey tells “Interest rates are unbelievably low, there’s very little new supply—which is rare in a recession, and investors are very interested in CRE because they’re disappointed with the stock and bond markets. So we expect commercial real estate to be one of the best performing asset classes going forward.” Added Woloshin, “Over the next decade, there’s going to be increased interest in commercial real estate from global investors. It’s an asset with lower volatility assets and a stability of returns.”

But it’s more than interest rates, or interest from investors, that’s spurring CRE’s day in the sun. “The spread to the 10-year Treasury is at a record high,” Woloshin tells, “so the cost of funding is so low that people are ‘saying I can borrow now because interest rates are low so even if the return on my investment isn’t as high as it might be in other sectors, it’s  still a good investment.”

Said Yeskey during his presentation, “GDP will continue to rise in 2013, not by the 3% or 4% that some people are predicting—because there’s a decline in business investment—but consumer spending is still strong.” That will propel GDP forward more than 2%, he said.

Still, some factors in the economy are preventing major growth, both in CRE and in the general economy, according to the analysts.

“Companies are allocating much less space per employee,” Woloshin said. “In the past, the standard was 240 square feet but now it’s around 125 to 180 square feet for each worker; with 180 being the new rule.” He explains why this is happening to “Companies are looking to cut costs where they can and real estate is low hanging fruit for many of them. Plus a lot of companies are going to open floor plans in the belief that it spurs collaboration.”

This shift could alter office development going forward, he notes. “It has changed architecture; as people look to future development, they will look at how much space employees will need, so a company that may have needed 300,000 square feet may need 200,000 square feet now.”

But it’s not just office space that’s shrinking. “Business investment hasn’t increased, and that’s where the real job growth is.” Yeskey said. “If you get businesses spending, you get job creation and then you fill up offices,” he tells “And when more people have jobs and feel secure, they start spending and then retail picks up, companies build or expand their warehouses, giving the industrial sector a boost, and home buying and construction improves.”

The government needs to make several moves for that to happen though, he adds. “We need tax reform. We need the government to do something about corporate taxation and get money back to the United States. There’s a tax on foreign investment in the U.S., and that needs to end.

“And we should give incentives to manufacturers in order to encourage them to create and support high quality jobs,” Yeskey continues. “Every other country has this except us.”