Bob O’Brien, Global Real Estate Sector Leader at Deloitte, join The Commercial Real Estate Show to talk about where we stand in the current economic cycle and what we might expect going forward for the office and multifamily sectors. Some highlights include:
- Low interest rates and lack of new supply driving real estate value increases
- Now 8 or 9 years into an 18 year cycle
- Prices relative to peaks of prior cycle raise question of whether a downturn might come sooner than normal 18 year cycle
- Lack of new supply provides comfort that such a downturn is unlikely
- Leverage and excess supply are 2 variables that drive downside of a cycle, neither happening now
- Interest rate increases would likely have a negative effect
- Expect 2 or 3 fed rate increases in 2017
- 2018 Interest rate environment will depend on economy