A recent survey conducted by CIT Group Inc. found that middle market commercial real estate executives are feeling optimistic toward the commercial real estate market and are looking to act upon long-term real estate investment opportunities.
As we begin the new year, we are observing a renewed optimism toward market recovery, though many middle market executives still exercise caution due to the current tax and regulatory climate that strains companies. Fifty-seven percent of industry executives agree the U.S. commercial real estate market is in recovery, with ten percent calling the recovery “very strong.” Despite this optimism, just under a third of industry executives predict a significant decline, naming interest rates and unemployment among their top concerns as well as The Affordable Care Act, foreclosures, and consumer confidence.
Twenty-eight percent of executives say the availability of tax credits and cash grants for green energy significantly influence the design, renovation, and related commercial real estate investments. Twenty-two percent say the availability of tax-exempt financing has played a significant role in the past investments and twenty-seven percent agree it will continue to play a significant role throughout the year and just six percent say their capital is questionable or has completely dried up.
Overall, fifty-one percent are likely to pursue bank financing in the next year, while eighteen percent of executives say they are very likely to do so.