The conference also included a discussion with investment sales experts about the current buying climate. The panelists said that the buyer pool is shrinking, especially for assets in secondary and tertiary markets.

LOS ANGELES—“Who knew that Brexit and Goldilocks were living in the same house,” quipped Michael Van Konynenburg, president of Eastdil Secured, at the ninth annual Allen Matkins View From the Top conference. Van Konynenburg gave the economic update at the conference, saying that the US economy was off to a slow start—in fact, he says that we lost a quarter of the year—but helped to fuel growth. “Start off with angst around where we are going, and then Brexit hit in the second quarter.

As a result of the Brexit effect, commercial real estate investment is only down 14% over last year, which isn't bad considering that we lost a quarter of the year. “People are riding on the edge of their allocation, and many are going back to board and asking for increase in allocations,” Van Konynenburg said in his update. “Selling activity is about the same, but major institutional buying activity is down 50%.”

While there are still concerns about the economy and the length of the cycle, Van Konynenburg's forecast was positive with healthy job and year-over-year wage growth. “A lot of the story is positive, which is why we continue to look at Fed raising rate,” he said. According to his statistics, there is a 60% chance that the Fed will raise rates by the end of the year. Van Konynenburg is looking forward to the rate increase sooner than the end of the year. “I hope they do it in September, and we get over uncertainty,” he said. “The economy can handle it.”

Van Konynenburg also said that there weren't many weak spots in the economy that could cause a downturn. He said that the cycle wasn't going to end with an oversupply issue, over leverage or a banking crisis. Geopolitical issues, a loss of faith in central banks or Fed “temper tantrum” on rates were the areas where Van Konynenburg foresees the potential for economic issue. However, it isn't unusual to have concerns like this, and in fact, it has become commonplace. “There are always concerns about where we are in this cycle,” he says. “We have spent our whole careers asking that question.”

The conference also included a discussion with investment sales experts about the current buying climate. The panelists said that the buyer pool is shrinking, especially for assets in secondary and tertiary markets.