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Seyfarth Shaw’s 2017 Real Estate Market Sentiment Survey Results

February 27, 2017

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Seyfarth Shaw’s 2017 Real Estate Market Sentiment Survey Results

February 27, 2017 | by James Sprow | Blue Vault

The Seyfarth Shaw second annual survey of the commercial real estate market found that respondents among U.S. commercial real estate executives see rising interest rates among the top concerns, with 98% of respondents expecting rate increases by the Fed and 77% expecting multiple rate increases.

Respondents were evenly split regarding how many basis points the commercial real estate market can absorb before experiencing material adverse impact: 51-100 basis points (33 percent) vs. 101-150 basis points (32 percent). 

With the Federal Reserve announcing its intention to raise interest rates multiple times in 2017, respondents rank rising interest rates as their top concern for 2017. Political change-over and tax policy rank fourth and fifth this year, overtaking maturing CMBS loans from the year before.

As in 2016, concern regarding the industry’s ability to refinance record levels of maturing CMBS loans remains strong:  86 percent of respondents express concerns about the industry’s ability to refinance CMBS debt that is maturing in 2017, nearly matching 87 percent in 2016.

Over two thirds of respondents this year believe that the Trump Administration will have a positive impact on the 2017 commercial real estate market. Deregulation was top of mind with most respondents followed closely by Tax Reform. Many survey respondents single out the dismantling of Dodd-Frank as a positive impact for the industry.

To the question of “Which of the following represent the greatest concerns for the CRE industry in 2017, total responses were as follows:

Rising Interest Rates: 888
CRE Supply/Demand Issues: 772
U.S. Banking Regulations:  684
Political Change-Over:  640
Tax Policy:  634
Maturing CMBS Loans:  603
Reduced Foreign Investment:  569
Trade Policies:    528
Domestic Terrorism:  404
Brexit:  334

The full report can be seen at: http://www.seyfarth.com/dir_docs/publications/REMSS_02142017.pdf

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