Law Office of Henry B. LaTorraca Civil Trial Attorney

Lower energy prices fuel commercial real estate gains

Falling energy prices have left many California residents with more money to spend each month on goods and services, and a nationwide surge in consumer spending has fueled the commercial real estate market, according to a leading financial institution. The Teachers Insurance and Annuity Association - College Retirement Equities Fund said in September 2015 that this trend is likely to continue as long as economic forecasts remain positive. The institution provides financial products aimed at retirees in the academic, medical and research fields.

While residential property sales remain mired in a slump caused by rising prices and inventory shortages, demand for commercial real estate such as office and retail space has been growing. Yields from commercial properties are on course for the sixth straight year of double-digit gains according to the NCREIF Property Index, and prices in many markets are now higher than they were before the 2008 financial crisis.

Industry experts are quick to point out that trends in the residential or commercial property markets are often unpredictable, and they remind property investors and speculators that interest rate hikes spurred by inflationary concerns could lead to reduced demand and falling prices. However, the economic recovery remains fragile in the eyes of many experts, and the Federal Reserve has been reluctant to jeopardize matters by raising interest rates.

Attorneys with commercial real estate experience could also point to other factors that may influence returns. Such factors could include office or retail space vacancy rates and the number of construction projects recently started. Attorneys may also seek to assist property developers and real estate investors by reviewing contracts and other important documents for vague or contradictory language that could lead to misunderstandings and disputes. Attorneys could also provide assistance when regulatory issues cause delays or permit disputes crop up.

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