Commercial real estate folks are just a tiny bit hesitant to call the recent recovery a hearty one in their business.
That’s according to the seventh semi-annual Minnesota Commercial Real Estate Survey, which was released Tuesday by the University of St. Thomas’ Shenehon Center for Real Estate.
The results, tallied from a group of 50 CRE experts locally who work in development, finance and investment, indicate “lingering concern” about commercial real estate conditions two years from now. It’s a trend that the survey indicated last year, as well.
Those who participated were asked about their expectations for vacancy rates, rental rate growth, land and building material prices, new project financing and rates of return.
The survey showed a composite score of 47 based on a zero-to-100 index. A score higher than 50 indicates a more-optimistic view of the market, while a score under 50 skews toward pessimism. This is the second time the score has dipped below 50, “indicating a less-than-neutral expectation regarding the future market forecast,” the survey stated.
Herb Tousley, the University of St. Thomas director of real estate programs, said in a statement that there are some key differences when compared with results from last year. They include a higher level of confidence that rental rates and occupancy will continue to grow into 2015.