WASHINGTON, DC-Respondents to The Real Estate Roundtable's Q4 Sentiment Index report stable current conditions for the industry--but they are less optimistic about future improvement.

The "Current Conditions" portion of Real Estate Roundtable's Sentiment Index remains flat at 70 points. However the "Future Conditions" segment has dropped four points, registering a score of 64 compared to 68 in Q3. As a result, the "Overall" portion of the index dropped 3 points to a score of 67, versus 70 for the previous quarter.

Concerns center around how an eventual uptick in historically low interest rates will impact cap rates and valuations in commercial real estate markets. Policy gridlock in Washington is also a worry.

"Dispelling the economic uncertainty that hangs over the economy is now the #1 priority for Congress," said Roundtable President and CEO Jeffrey DeBoer. "In addition to a budget compromise, there are other public policies that would help foster economic certainty, spur investment in domestic markets and preserve commercial real estate's role as a job creator." On DeBoer's list: an extension for the Terrorism Risk Insurance Act (TRIA), reforming the Foreign Investment in Real Property Tax Act (FIRPTA), passing balanced immigration reform legislation, and comprehensive energy reform.

The Roundtable's latest survey touches on a separate but related concern, for the Washington DC market specifically that was just noted in a new report co-published by PwC US and the Urban Land Institute: Fed fatigue. That report found that the area's perception as a safe investment haven is rapidly eroding—and not despite its role as home to the federal government but because of it.