2019 US CMBS issuance was nearly $98B, up 27% from $76.9B in 2018. Annual issuance surpassed expectations after the yield on the 10-Yr UST moved and stayed below 2% in August. With interest rates projected to stay low, 2020 issuance is expected to be consistent with or exceed 2019. Expect a strong first half of the year with some uncertainty in the second half with the upcoming US Presidential election.
The U.S. economy ended the year on an optimistic note. Businesses continued to add jobs at a healthy clip. Employment in the key office-using sectors increased by 150,000 jobs in the fourth quarter. Consumer confidence remains high. Wages are rising faster than inflation, yielding extra spending power, reflected in the 18.8% increase in online shopping over the holiday season. The industrial market finished strong absorbing 68.8 msf in the Q4, the most space in a single quarter last year. All asset classes, including retail, saw positive asking rents in 2019.
The 2020 outlook for interest rates looks like it will be quiet with many central banks signaling no changes to potential rate cuts.