Despite concerns regarding the waning growth prospects in emerging market economies and resulting decline in U.S. financial-asset pricing and stock market volatility, the U.S. economy appears to be on solid footing. The labor market continues to tighten, while improving consumer confidence, retail/automobile sales, and housing market conditions further demonstrate the sustained expansion of the domestic economy. The second upward revision to second quarter U.S. GDP numbers further indicates this positive momentum. This growth is supporting real estate market fundamentals, prompting healthy capital fl ows and continued downward pressure on cap rates through the latter part of 2015. While U.S. economic and real estate market conditions remain positive, a number of headwinds in the form of the strengthening dollar, global financial market volatility, and slumpingemerging market economies could dampen future growth. Furthermore, despite Yellen’s recent comments supporting the increased likelihood of a rate increase before the end of the year, the Federal Reserve’s decision to delay raising the benchmark interest rate has only added to the rising economic uncertainty.
Source : CBRE Global Investors