A new report from CoStar Group examines the slowed activity in commercial real estate during the third quarter this year, and the causes. With third quarter earnings calls being hosted this week, the largest publicly traded CRE firms have indicated that the lull in leasing and sales activity in the United States reflects cautious businesses waiting for results from the Presidential election, national tax and debt issues, and concerns regarding the ongoing debt crisis in Europe coupled with the slowdown in Asian economic growth.
Comments from industry leaders quoted in the CoStar article include:
"The market environment turned more cautious in the third quarter," noted Brett White, CEO of Los Angeles-based CBRE Group Inc. "Many investors and occupiers deferred making decisions and commitments. The current recovery, unlike previous ones, remains frustratingly slow and inconsistent. Nevertheless, we continue to believe that the recovery is ongoing and as we've been saying for some time, remain subject to quick swings in market sentiment."
"We believe we see that business is coming our way because of general uncertainty and hesitancy, and that traditionally favors the strong brands in any markets, and ours is no exception," said JLL CEO Colin Dyer, participating in the company's conference call Tuesday morning via mobile phone due to dislocation by the hurricane. "For next year, we anticipate markets that are not going to get worse, but at the same time, not improving as quickly as businesses might hope," he said. "There are encouraging signs. The U.K. emerging from recession and China perhaps, turning around its declining growth rates. But there are also global-scale issues that concern business confidence, the post-election fiscal cliff in the U.S. and the ongoing issues with sovereign debt in Europe being the two principal examples."
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