Real estate economists boosted their outlook for economic growth in March’s ULI semi-annual survey, compared with the survey of six months ago. The passage of the Tax Cuts and Jobs Act in December 2017 may have positively affected their forecast; this same group had shown a tempering of their expectations in the previous survey. The expectation for stronger economic growth is accompanied by the potential for higher inflation and interest rates. The higher rates, however, are not projected to be detrimental to real estate returns: Forecasts for industrial returns are higher than in the previous survey while office, retail and apartment returns are similar or revised just slightly downward. Still, returns over the three-year forecast period continue to show the same moderating trend projected six months ago.

These results are based on the ULI Real Estate Economic Forecast (formerly ULI Consensus Forecast), prepared by the ULI Center for Capital Markets and Real Estate. The survey was completed in March 2018 by 48 economists and analysts at 36 leading real estate organizations and includes forecasts for 2018, 2019, and 2020. (The survey of six months ago forecast 2017, 2018 and 2019).

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