United States Real Estate Report Q1 2012
Business Monitor International, January 2012, Pages: 61
The US saw key developments in Q3 with its downgrade by S&P for US debt and the lifting of the debt ceiling by the US government. While the congressional committee must continue to find spending cuts, in the worst case scenario the US could reach the new debt ceiling in January 2012. BMI’s 2012 real GDP growth forecast has recently been downgraded, to 2.0% from 2.4%. The analysis suggests that the US is dangerously close to a recession. This change in perception for the economic outlook may result in a temporary pause in the recovery of the property sector. Concerns have arisen among real estate players (and the public) about Washington’s success so far in addressing fiscal issues. This has resulted in declining confidence in any substantial commercial recovery, according to a survey by the Real Estate Roundtable.
Despite the well publicised economic uncertainty surrounding the US, there has been a surprising level of optimism in the commercial real estate market with regard to new developments, purchases and investments. The country seems to be remaining positive in the face of a potentially subdued market, which could help to bolster real estate in the event of any further decline in the economy.
Key Opportunities In The Real Estate Market
- After a better-than-expected Black Friday period for retailers, the holiday retail season is expected to be extremely positive and is likely to cushion retail real estate activity in the short term.
- Prime office markets seem to be holding up well, in spite of the economic uncertainty. Recent deals involving desirable office space have highlighted that this side of the market could help to boost areas of the office sub-sector which may fare less well in the coming months.
- A number of real estate developers have recently begun targeting overseas investors, in the hope that a fresh wave of commercial investment could result from international companies.
- It appears that strong tourism levels continue to buoy real estate activity in that area, with a number of new hotel projects announced in recent months.
Key Risks To The Real Estate Market
- If the economic recovery does stall, the progress currently occurring in the property sector will slow. Impediments to economic recovery include high energy and commodity prices, unemployment, the level of debt in the US and the eurozone, and the US budget deficit.
- Cushman & Wakefield reported a slowing in the recovery of the office market in Q311, meaning that optimism in the sector could be short-lived.
Executive Summary
SWOT Analysis
US Real Estate/Construction SWOT
US Economic SWOT
US Business Environment SWOT
Real Estate Market Overview
Real Estate Market Analysis
Table: The US Real Estate Market – Historic Rents, 2010 and 2011 (US$/m2/month
Table: The US Real Estate Market – Net Yield, 2011 And 2012 (%)
Table: The US Real Estate Market – Terms Of Rental Contract/Lease, Mid-2011
Table: The US Real Estate Market – Indicated Vacancy, Mid-2011
Industry Forecast Scenario
Real Estate Outlook
Table: The US Real Estate Market – Rentals, 2011-2012 (US$/Square Metre/Month)
Table: The US Real Estate Market – Forecast Yields, 2011-2016 (%)
Construction and Infrastructure Outlook
Table: Construction Data And Forecasts, 2011-2015
Table: US Construction And Infrastructure Industry Data, 2012-2020
Construction And Infrastructure Forecast Scenario
Macroeconomic Outlook
United States – Economic Activity
Business Environment
Real Estate/Construction Business Environment Ratings
Table: Real Estate Forecast
US Business Environment
Table: BMI Business And Operation Risk Ratings
Institutions
Table: BMI Legal Framework Rating
Infrastructure
Table: Labour Force Quality
Market Orientation
Table: Trade And Investment Ratings
Table: Top Export Destinations, US$mn, 2005-2009
Operational Risk
Competitive Landscape
Company Profiles
Bechtel
Fluor Corporation
KBR
Pulte Homes (Including Centex Homes)
Turner Construction Company
BMI Methodology
How We Generate Our Industry Forecasts
Construction Industry
Bank Lending
Real Estate/Construction Business Environment Rating
Table: Weighting Of Indicators
Sources
- Bchtel
- Fluor Corporation
- KBR
- Pulte Homes (Including Centex Homes)
- Turner Construction Company
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