McNearney: Expansion Has Runway Beyond the Holidays

“Business investment, factory output, consumer and business sentiment and corporate profits are nearing all-time highs,” says McNearney.

HOUSTON—Neither a trio of hurricanes, devastating wildfires in California nor the ongoing debate about the effects of pending tax reform could slow the pace of economic expansion, and that’s among the reasons that Transwestern’s Tom McNearney sees the momentum carrying forward into 2018. In the latest edition of Transwestern’s the BRIEFING, McNearney notes that business investment increased 3.9% in the third quarter despite the hurricanes, and that longer term, institutions’ portfolio targets for commercial real estate are up 20 basis points from a year ago to an average of 10.1%.

Even so, the Transwestern CIO sees a sober outlook among investors. “While there has been a general inflation in asset prices of all kinds, the markets do not appear to be suffering from the irrational exuberance that has characterized the end of other expansions,” McNearney says. “In fact, investors are exhibiting worry, uncertainty and caution.”