"2005 will be a very good year for commercial real estate," MBA chief economist Doug Duncan said during the lunch briefing; Duncan is also the organization's senior vice president for research and business development. In a written release, he supports the theory, noting that the gross domestic product's estimated annual growth rate of 3.5% will lead to, among other positive outcomes and increased employment.

"There will likely be a slight uptick in the inflation rate in 2005, which will support the Federal Reserve's continued march upward with the Fed funds targeted as the Fed maintains focus on its No. 1 objective of keeping inflation at bay," Duncan explained. "Long-term rates will therefore remain quite low and thus supportive of real estate finance activity, whether residential or commercial." And the aforementioned factors are expected to produce the same favorable results in 2006 and 2007.

On a more specific note, namely the commercial real estate market, MBA foresees a repeat of 2004 when loan originations reached record volume. Such robust activity for this year will be facilitated through sustained low-interest rates and the rebounding economy, as well as impending refinancings due to yield-maintenance clause expirations. In the multifamily market, MBA anticipates rapid sales and refinancings that will mirror the strong volume seen in 2004.