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THE PULSE r ) On the Right Track e A new forecast from the Urban Land Institute indicates that, for the most part, the real estate industry is headed for gains through 2014, though the pace of housing's recovery is likely to remain slow and steady. T Estate Consensus Forecast, and while the organization's find- ings are somewhat mixed, most of the economic indicators in the report point to continued improvement in housing market conditions through 2014. ULI's study encompassed he Urban Land In- stitute (ULI) recently released its semiannual survey, the ULI Real and housing starts and home prices. Speaking out on the latest opinions from 39 leading real estate economists and analysts from across the U.S., and the resulting data reflects their con- sensus on 26 economic indicators related to the nation's mortgage and real estate industries. Among those indicators are property transaction volumes, issuances of commercial mortgage-backed securities (MBS), property invest- ment returns, vacancy rates and rents for several property sectors, 18 | THE M REPORT forecasts, the organization's SVP and executive director of ULI's Center for Capital Markets and Real Estate, Dean Schwanke, noted, "The survey indicates that while economic growth will be steady, it will be slow and subject to continued uncertainty over Europe's debt crisis, the outcome of the presidential and congressional elections in the U.S., and the complexities of tighter financial regulations in the U.S. and abroad." He added: "What this survey TREND: The overall economy will see steady improvement, though the pace of recovery will remain sluggish. KEY FACTORS: Continued low inflation; continued low inter- est rates INCREASE IN REAL GROSS DOMESTIC PRODUCT (GDP): 2012—2% 2013—2% 2014—2% CONSUMER PRICE INDEX: 2012—1.9% 2013—2.0% 2014—3.0% UNEMPLOYMENT RATE: 2012—8.1% 2013—7.8% 2014—7.0% JOB CREATION: 2012—1.8 million 2013—2.0 million 2014—2.4 million 10-YEAR TREASURY RATES: 2012—1.8% 2013—2.3% 2014—3.0% TREND: A more significant recovery is under way for the single-family housing industry. KEY FACTORS: Consumers sense a tipping point; borrowers attracted to the market by low mortgage rates SINGLE-FAMILY HOUSING STARTS: 2012—530,000 2013—675,000 2014—800,000 TREND: Commercial real estate activity will see a modest increase. KEY FACTORS: Improvements in commercial MBS (CMBS); flagging returns for equity real estate investment trusts (REITs) will decrease; flagging returns for commercial real estate TRANSACTION VOLUME: 2012—$223 billion 2013—$250 billion 2014—$275 billion ISSUANCE OF CMBS: 2012—$35 billion 2013—$45 billion 2014—$60 billion TOTAL RETURNS FOR EQUITY REITS: 2012—15% 2013—10% 2014—10% TOTAL ANNUAL RETURNS FROM INSTITUTIONAL- QUALITY DIRECT REAL ESTATE INVESTMENTS: 2012—10% 2013—8.5% 2014—8.5% suggests is that, in general, the U.S. economy is making progress inch by inch. Nothing indicates a quick turnaround, but the economy and the real estate industry are moving toward a notable improvement by 2014." RETURNS BY SECTOR: Apartments: 11.1% in 2012 7.8% by 2014 Office: 9.4% in 2012 8.7% by 2014 Retail: 11.4% in 2012 8.0% by 2014 Industrial: 10.4% in 2012 8.9% by 2014 About the Urban Land Institute: The Urban Land Institute (www.uli.org) is a nonprofit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in sustaining and creating thriving communities worldwide. Established in 1936, the Institute has nearly 30,000 members representing all aspects of land use and development disciplines. About the ULI Center for Capital Markets and Real Estate: The ULI Center for Capital Markets and Real Estate (www.uli.org/capitalmarkets) focuses on real estate finance, real estate industry and investment trends, and the relationship between the capital markets and real estate. The Center is engaged in a variety of projects including the annual Emerging Trends in Real Estate® reports, the monthly ULI Real Estate Business Barometer, the annual ULI Real Estate Capital Markets Conference, and numerous other programs.