Continued economic growth should propel industry forward in the coming year, expert says
Commercial real estate professionals surveyed by PwC believe 2020 will be as robust as the previous year or few years, according to an annual litmus test of the industry.
“The prospects for profitability in the real estate industry for 2020 are virtually the same as in the past five years,” PwC Partner Mitch Roschelle and head of the consultant’s national real estate advisory practice told the ULI gathering.
Of 2,200 national respondents, 54% believe the industry will be as robust as the previous year, with 23% split evenly in saying business will be better and worse over the next 11 months.
Roschelle says the sentiment stems from the 128 consecutive months of economic expansion, a U.S. record — fueled largely by consumer consumption and overall confidence., which sits near an all-time high.
“Economic growth is the engine that drives real estate,” Roschelle says. “When the economy is strong then demand is strong, investment is strong and the supply of capital is strong.”
Roschelle notes, too, that the U.S. economy isn’t showing of collapsing, either.
“What we’re not doing is re-inflating a bubble,” he says, alluding to the cause of three of the past four economic recessions, when housing, credit and savings and loan recklessness melted growth down.
He contends that only one known dynamic could, at present, cause the U.S. economy to falter.
“If anything, the inability of businesses to find the workers it needs could slow down this economy,” Roschelle concludes.