NEW YORK CITY—The year ahead for the domestic economy and commercial real estate appears to be more of a good if not necessarily spectacular thing, judging by the annual forecast report from Situs RERC, Deloitte and the National Association of Realtors. Expectations & Market Realities in Real Estate 2018 – Stability in a Risk Environment calls for steady economic growth and continued stability across most of the major property types.

“As we near the end of one of the longest economic expansions in US history, CRE investing can continue to be a secure way to build wealth by carefully considering the space market fundamentals,” according to the report. “CoStar data show that overall, CRE fundamentals are sturdy, with vacancy near or below their Great Recession levels across most property types. Although increased supply across the sectors will begin to tilt vacancies higher, rents should remain relatively stable as demand for space is expected to remain solid” throughout the year.

The most likely scenario for the economy this year is GDP growth ranging between 2% and 3%, according to Situs RERC, Deloitte and NAR. According to Situs RERC's Treasury Forecast, the 10-year Treasury rate will increase to 2.8% by the fourth quarter of this year and 3.2% by the end of 2019 in this base case scenario. Under this scenario, moderate wage growth will occur, coupled with increased spending by consumers and businesses.