END OF OCTOBER ECONOMIC UPDATE
Written by: Cade Polter
The United States’ economy continues to be in a spot of uncertainty. The long-predicted recession for the second half of 2023 has yet to come crashing down upon us, but still looms ahead because of the recent rise in both GDP and inflation. Third quarter data from the U.S. Bureau of Economic Analysis shows that GDP grew rapidly at a 4.9% rate. The Federal Reserve meets again this week to determine whether to input another hike into the interest rates. The rate hikes are supposed to cool down the economy, but shown by the GDP growth, it no longer seems to be working as well as the Fed hoped. Currently, many economists predict the Fed will not raise rates this meeting, but they aren’t ruling out future rate hikes because of the recent increase of strong economic data.
What’s Next for CRE
Nike is the most recent company to announce a return to office policy, continuing to push hope into the pandemic-deflated office sector. The return to office policy comes with employee requests for the workplace, such as health and wellness initiatives, parking, and more aesthetically pleasing properties. Adding features like these make the spaces more lucrative to rent for tenants, but also makes the tenant’s company a better place to work. Single-tenant transactions are up in the year of 2023, and many expect this to continue to be a growing force because of the control and security of the space. Single-tenant space are harder to come by and more costly though, so the higher priced asks for these spaces align with that. Another office building is being converted into luxury apartments, this time The Flatiron Building in New York City. Large cities are finding new ways to incorporate large vacant towers that once were full, but now need to be transitioned to avoid becoming abandoned.
Sources: U.S. News, U.S. Bureau of Analysis, Globe St, WSJ