Yet, according to most panelists and speakers, the historically prolonged CRE boom strongly signals a cyclical downturn ahead.

While the economy remains stable, Chandan said, “We have a monetary policy consistent with crisis conditions, and the Fed is unsure of how to unwind its current position. As it stands now, our quiver is empty. Monetary policy is as loose as it can get.”

Chandan's keynote, “The State of Commercial Real Estate,” kicked off the conference and raised compelling questions about the economy, interest rates, housing, fundamentals, capital and regulations, providing an important reminder that set a cautious tone for the rest of the event: If we think nothing can go wrong, this is good indication that something is going to. “Our economy has been growing since 2009, with average growth of 2% GDP per year, but we are still not where we should be,” Chandan said. “Drags on US growth include under investment in infrastructure, a need to adjust the education system and regulation of capital markets.”

The key to further growth on all fronts: the labor market. For the median American family, a stable economy depends on personal experiences. Ultimately, Chandan said, job growth matters more than GDP growth. While unemployment is low and people are not losing jobs like they once were, we are experiencing “one of the biggest mismatches between skills and lack of qualified job hunters in history,” he said.

On the CRE front, said Muoio, deal volume is slowing, while prices—bolstered by the white-hot multifamily market—are on the increase. “There is a disconnect between buyers and sellers. We saw $105 billion in CRE transactions in the second quarter, the lowest level we have seen since mid-2014.”

As far as pricing goes, real estate values vary considerably, depending on asset class and location. Lodging, however, is the only commercial property sector to see year-over-year declines in values. Concerning other sectors, Muoio said:

• Retail is being eaten alive by e-retail, with store footprints shrinking;
• Industrial is booming, fueled by technology and a boom in distribution fulfillment centers;
• Office fundamentals continue gradual improvement, but marked by a distinct bifurcation of markets: central business districts versus suburban. Moreover, said Muoio, “the regional divergence in markets is stark.”

Chandan said the titles of his Trigild presentations over the last few years—The Hunt for Liquidity, 2011; The Hunt for Yield, 2012: From Expansion to Recovery, 2013; An Appetite for Risk, 2014: The Best of Times, 2015 and Too Soon for Hindsight, 2016—are especially telling and indicate a slow move off the peak. “There are more dollars chasing a fixed number of opportunities,” he said. “At one point, we were worried about where capital would come from. Now we see some segments saturated with capital. The US is a safe harbor, so capital flows here.”

While we are seeing a tightening of lending standards, we are still finding ways get deals done, Chandan said. “There is still more lending in more places to more borrowers. The loans we need to worry about are the ones we make when we're comfortable about the market. “

Homeownership, said Muoio, is at a 51-year low. “Millennials, who now outnumber Boomers, were hammered by the Great Recession. Saddled with student debt, they witnessed the housing bust firsthand at a formative age.” This seared their memories, Muoio pointed out, and they will not quickly forget that homeownership can be risky. This sentiment, along with rising home prices and a tendency to have families and marry later, are all fueling multifamily demand.

However, the rental population is growing because of demographics, and Chandan questioned whether the rental bias will hold. “While there has been a dramatic swing toward renting, Millennials will not always be 22, and their preferences will change, too.”

Chandan said, “There is a record amount of more multifamily under construction—mostly high-rise, luxury properties in urban cores,” yet investors should be cautious. The market is cyclical, and “if things don't go our way in multifamily, some loans may be problematic.”

Robert Guest of The Economist, posed some compelling questions about trade and immigration. There is a growing political divide fueled by a “rise in populist parties of the far left and far right. Should we embrace trade or protect local industry? Welcome immigrants or build barriers?”

Guest said, “The cumulative damage when you try to cut off trade is enormous.” And the benefits of trade are many, he noted. You have “a willing buyer and willing seller, and both benefit from the exchange. Trade allows specialization; companies do what they are good at. It also raises living standards and increases purchasing power.”

Keynote speaker Donald Sheets addressed clouds gathering over the global economy, raising concerns about growing economic volatility and the mounting level of negative-yielding global debt. “We are seeing indications in emerging markets that not all is fine.” Especially troubling, he said: continuing global instability in places like Turkey and Brazil, the fact that Japan's Central Bank owns 60% of the (ETF) market, massive debt maturity looming in China, deterioration in equity values of global banks and a spike in downgrades of sovereign credit ratings.

The only two countries whose bond spreads have tightened are Serbia and Croatia, Sheets said. “There is a real disconnect in sovereign markets. And trillions of US dollars are in sovereign debt. There has been nothing like this before—we are seeing negative yields across the board.”

Chandan concurred the most significant threat to the global outlook may be rising debt levels, serviceable at historically low interest rates. “The growth outlook is subject to exogenous shocks, and longer term challenges are still largely unaddressed.”

Adding to global woes, said Muoio, are the depressed energy sector, stagnant trade flows and ongoing uncertainty in the aftermath of Brexit. Ultimately, he said, the hindrance for economic growth is “uncertainty.”

Added Chandan, “Economic expansions don't die of old age—our risk-taking behaviors simply start to return.”