CRE Outlook: Steady as She Grows

Upward pressure on pricing now extends to smaller markets, says Yun.

WASHINGTON, DC—Stability and decent yields will continue to underpin the commercial real estate sector this year, according to the National Association of Realtors’ quarterly commercial real estate forecast. A key theme for 2017 is the growing demand in smaller markets.

“Similar to the biggest ongoing challenges in the residential market, supply and demand imbalances continue to put upward pressure on commercial property prices as investors search for yield in smaller markets,” says Lawrence Yun, NAR’s chief economist. “Realtors are increasingly citing inventory shortages as their top concern as the pace of new projects slows in large cities and middle-tier and smaller markets see a growing appetite for space.”