From a small northwestern observatory…

Most of the conversations I’ve had about real estate and The Donald focus on housing, and particularly the storm clouds forming over low-income housing.  However, while The Donald is one of the luckiest income presidents in history in terms of inheriting a great economy, his Achilles heel may be the commercial real estate sector.

CBRE was kind enough to tweet the accompanying chart this morning, which is pretty self explanatory.  (Of course, I’ll go ahead and explain it anyway.)  After the real estate storm that Obama inherited, commercial transactions have regained lost ground in the past several years.  Note that we peaked in 2015 with total commercial transactions of nearly $1 Trillion for the year.  However, the market backed-off considerably, with the first three quarters of 2016 coming in a bit lower than the previous year, and then the 4th quarter coming in nearly $50 billion lower than the same period in 2015.

Did we just see a trend line break?  One wonders.  Commercial real estate feeds a lot of other sectors of the economy.  For example, new construction employs lots of the sorts of jobs The Donald is promising.  We need to keep our finger on this particular pulse.