Beige Book Looks "Expanded, Upbeat" for 2016 CRE

The Federal Reserve has released the latest Beige Book, summarizing how the economies in the Fed's 12 districts are performing, which finds that the reporting districts are "generally upbeat." With respect to real estate, the data indicated that activity was generally improved over the last Beige Book, with stronger activity cited for multifamily construction and commercial real estate. Overall, most districts reported that loan demand grew, credit quality improved, or loan delinquencies fell, with credit standards changing little. An excerpt from the summary follows:

Most reporting Districts characterized nonresidential real estate activity as modest to moderate; Boston and New York indicated little change. Rental rates rose in more than half of the reporting Districts, and vacancy rates were mixed. Most Districts reported modest or moderate growth in commercial construction, and the Dallas District noted high levels of industrial construction in Dallas-Fort Worth. Contacts in the Atlanta District expect construction activity to increase slightly, while contacts in the Philadelphia, St. Louis, Minneapolis, and Richmond Districts expect overall commercial real estate activity to continue to strengthen at least modestly.

To read the full January 13, 2016 Federal Reserve Summary of Commentary on Current Economic Conditions by Federal Reserve District, click here. For more news and information visit Blumberg Partners.

Latest Beige Book Shows Moderate Growth

The U.S. Federal Reserve has released the latest Beige Book, more formally called the Summary of Commentary on Current Economic Conditions, which indicates that economic activity increased at a modest pace in most regions of the country since the previous Beige Book report. Fed policymakers are widely seen raising interest rates for the first time in almost a decade at their next meeting on Dec. 15-16, but continue to parse data and trends carefully given the uneven nature of the U.S. recovery.

"On balance, economic and financial information received since our October meeting has been consistent with our expectations of continued improvement in the labor market," Fed Chairwoman Janet Yellen said in prepared text for a speech to be delivered in Washington today. "Continuing improvement in the labor market helps strengthen confidence that inflation will move back to our 2% objective over the medium term." A summary of the commercial real estate sectors follows:

Commercial construction strengthened modestly in most Districts since the previous report. The Minneapolis District saw continued strong growth, particularly in cities where commercial permitting increased. The Boston, Cleveland, Atlanta, Chicago, St. Louis, and San Francisco Districts reported moderate commercial construction growth. In the Boston District, office construction grew modestly in the greater Boston region. Demand remained strong in commercial building, multi-family housing, and higher education in the Cleveland District, while in the Atlanta District, non-residential construction was slightly up from a year ago and reports on apartment construction remained robust. The Philadelphia, Richmond and Kansas City Districts reported a modest pace of growth in commercial construction. Commercial construction increased in most major cities in the Richmond District. In contrast, New York reported little change since the previous report. The Dallas District reported that construction remained active, although construction started to taper off in Houston.

Commercial leasing activity generally grew at a moderate pace. Cleveland reported strong growth, while activity in the Districts of Boston, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Dallas and San Francisco expanded at a moderate pace. Commercial real estate improved in the Atlanta District, with increased absorption and rent growth across property types. Improvement in the Chicago District was widely distributed across the retail, industrial, and office segments, with increased demand for both sale and lease properties. Contacts in St. Louis reported slightly higher demand across all sectors, and expected demand to remain the same or increase slightly in the first quarter of 2016. The Minneapolis-St. Paul retail, office, and industrial space had positive net absorption, along with lower vacancy rates. Demand for commercial leasing increased mildly in the Dallas District, while office space activity was strong in the Dallas-Fort Worth area. Commercial leasing activity in New York was unchanged since the previous report.

For more news and information visit Blumberg Partners.

Fed's Beige Book and Commercial Real Estate

The U.S. Federal Reserve's latest Beige Book, more formally called the Summary of Commentary on Current Economic Conditions, was released today with figures pointing to continued modest expansion in economic activity during the reporting period from mid-August through early October. Citing "generally weaker" manufacturing activity, "subdued" wage expansion and a "slowed" pace of growth in some regions, the Fed's report highlights a handful of concerns while offering a modestly optimistic economic assessment overall.

According to the report, commercial real estate markets have shown signs of strengthening in all twelve federal reserve districts. Most noted improvement across all major segments, though New York and St. Louis noted some increased slack in the market for retail space. Commercial construction was also stronger, with Boston and St. Louis noting brisk construction in the health sector, including senior care facilities, and Cleveland also indicating strong demand for senior living structures. New York, on the other hand, noted some pullback in new commercial construction, though activity remained fairly brisk.

To read the full report, click here. For more news and information visit Blumberg Partners.

Latest Beige Book Comments on CRE Conditions

The latest Beige Book, prepared at the Federal Reserve Bank of New York, summarizing comments received from businesses and other contacts outside the Federal Reserve, was released this week. As BBC notes, growth appeared to slow in several regions across the US in May, with the manufacturing sector notably sluggish, which the Fed blamed on the disruption to supply chains from Japan's earthquake. An excerpt from the real estate portion of the report:

Commercial and industrial real estate markets have generally been steady since the last report, though there have been scattered signs of a pickup. Commercial leasing markets showed modest signs of improvement in the Richmond and San Francisco Districts. Boston and Dallas noted some firming in property sales markets, but Kansas City reported declines in prices for office buildings. Non-residential construction, though widely reported to be at very low levels, rose modestly in the Boston, Chicago, Minneapolis, and Dallas Districts, though Chicago noted that public sector projects are becoming smaller. Cleveland observed a pickup in industrial and high-end commercial development but a pullback in healthcare-related projects. Richmond reported some pockets of strength in the retail market. More broadly, contacts in a number of Districts expressed a general sense of optimism about the outlook for the second half of 2011.

To real the full report, click here. For more news and information, visit Blumberg Capital Partners.