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REIT Outlook and Top Real Estate Issues to Watch for in 2019

January 9, 2019

REIT Outlook and Top Real Estate Issues to Watch for in 2019

Calvin Schnure | Nareit

Will the economy maintain momentum in 2019, boosting demand for commercial real estate, and keeping property prices on their upward path? Or are there signs of weakening in the foundation that could lead to a downturn? Will the Fed keep raising interest rates, or are they likely to pause after one or two more increases? These are some of the top issues that real estate investors will face in 2019.

The next year is likely to be a good but not great one for real estate, with solid job growth, consumer spending and business activity driving demand for nearly all types of commercial real estate. There are several potential clouds on the horizon, though, that could darken the outlook.

Before we look at the top issues for next year, here’s a partial scorecard of the predictions I made in December 2017 for the performance in 2018. We won’t have full data on 2018 for a few more months, and will look at all the results at that time. Some areas where I was more optimistic than consensus turned out to be even better than I had expected—GDP growth through the third quarter has accelerated to 3 percent growth over year ago, and wages have risen faster than anticipated. Also, inflation has remained tame, slowing to 1.5 percent pace over the past six months after a short-lived surge earlier in the year.

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I have been using Blue Vault Partners for the past five years.  I have found them to be a valuable, unbiased resource when it comes to evaluating and comparing non-traded REITs.  The reports help me analyze which sponsors are doing a responsible job of managing their offerings.  This allows me to limit my REIT recommendations to only the most competitive products, and then track those REITs throughout their life cycle.

Gil Armour, CFP SagePoint Financial, Inc. February 3, 2016