The improvement in economic activity and employment is driving improving fundamentals which is attracting capital to real estate. An increase in the debt availability is also impacting the flow of equity into real estate.
In addition, to the improved fundamentals and capital situation, the potential for inflation and the Fed´s low interest rate policy is pushing investors to look for higher yield.
With the potential for inflation in the future, more investors are seeking investment in hard assets like real estate.
UF Commercial Real Estate Sentiment Index
The UF Commercial Real Estate Sentiment Index improved slightly this quarter. Respondents remain optimistic about the improving fundamentals of most property types, but continue to worry over the state of the national economy.
The improvement in the overall index was driven by the lenders, owners and other service providers.
Developers, brokers and appraisers all declined slightly in their outlook.