Economy Watch: Beige Book Reports “Modest” Economic Growth, Better For Most CRE

The recent expansion in economic activity has lead to stable or improved commercial real estate sales and leasing, with some markets doing better than others.
Janet Yellen, Chair of the Board of Governors of the Federal Reserve System

Janet Yellen, Chair of the Board of Governors of the Federal Reserve System

The latest Beige Book, released on Wednesday by the Federal Reserve and formally called “Summary of Commentary on Current Economic Conditions by Federal Reserve District,” came in a bit tepid. At least, the report’s favorite words describing the pace of overall U.S. economic growth remained “modest” and “moderate.”

The report is published eight times per year, with each Federal Reserve Bank gathering anecdotal information on current economic conditions in its district—larger than the city for which it’s named—through reports from bank and branch directors, as well as from interviews with key business contacts, economists, market experts and other sources. As the book puts it: “Reports from the twelve Federal Reserve Districts indicate that economic activity continued to expand at a modest pace across most regions from mid-May through the end of June.”

Commercial real estate sales and leasing activity remained stable or improved in almost all districts, the book said. Absorption rate and rent increases were documented in Atlanta and Kansas City, while improving industrial real estate markets were noted in New York, Richmond, Va., and Dallas. Office market conditions, however, were mixed among reporting districts.

The Beige Book also noted that commercial construction activity grew modestly from the previous reporting period. Construction activity picked up in New York, and Cleveland continued to report strong project pipelines. Reports on multifamily construction were mixed in Richmond, Atlanta, and Dallas. New York noted that multifamily construction has tapered off through most of the district.