Hollywood – February 6, 2017

National indicators

With a number of factors at play after the November election, and with the start of a new year, experts are currently sharing opinions and predictions from a variety of perspectives. In ournewsletter last month, we discussed the potential positives to come under new leadership in the White House and on Capitol Hill – most notably, deregulation for business.

During the January meeting of the Federal Reserve, the entity raised its benchmark rate, marking the second time for this rate increase since 2008. That increase indicates the Fed’s expectation that the economy will continue to strengthen to support the increase. However, Fed leaders were hesitant to make any long-term decisions, favoring a wait-and-see approach about the new administration’s policy changes.

Binyamin Appelbaum covered the meeting for The New York Times, writing:

“By holding rates at low levels, the Fed has sought to increase economic growth by encouraging borrowing and risk-taking; higher rates reduce the stimulative effect. The benchmark rate now sits in a range from 0.5 percent to 0.75 percent, still very low by historical standards.”

Most experts from various sources predict national growth between 2 and 3 percent in 2017.

What it means for commercial real estate

As we have discussed in many past articles, new jobs and an increase in personal income are great news for commercial real estate. With new jobs come new office leases and an influx of employees who need housing, which supports the multifamily rental market.

We have also discussed baby boomers’ increasing desire to rent homes vs. own, and the Southeast’s trend toward attracting this demographic bodes well for the multifamily market as well. Climate and lifestyle continue to be a draw for these renters, while the promise of jobs and career growth appeal to renters in other age groups.

Growth in the overall economy supports growth in our industry, so we are heading into 2017 with a positive outlook.

To learn more about PointOne Holdings’ investment opportunities in commercial real estate, please visit www.pointoneholdings.com. As always, we welcome questions, so please feel free to contact us at any time.