The commercial real estate has been on a rise for the last few years. After the dot com crash, commercial real estate revenues declined, vacancies rose, and rents decreased. But since late 2001, revenues have steadily increased. The investors put more and more money into the industry. The Federal Reserve flooded the industry with money through low interest rates. The investors put money into the market because of its high returns. It is predicted that real estate market will remain strong, but it will not be as great as it has been. The study shows, “More than 10 % of bank’s assets are in commercial real estate. The stead job growth and U.S. demographic trends is a good sign of apartment rentals. Apartment vacancies are decreasing. However, property transactions overall have already slowed this year and buyers have been holding out for better prices. It is rational and a sign that some of the effects of higher interest rates are percolating through the system.. Nevertheless, the real estate industry growth expects to be in 2.5 % to 3.5% range over the next year.
The word we live in now is more global than it was before and the capital can be rapidly pulled out of markets because of unexpected events that happen ten thousands of miles away. That makes real estate industry status as a favored child more precarious.