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Economic Momentum Continues to Pick Up Speed

Institutional Property Advisors provided an encouraging snapshot of the U.S. economy this week. Referencing a variety of indicators, including payroll growth, job creation, and wage growth, IPA predicts continued growth in an economy that is in its seventh year of expansion.

U.S. employers added 255,000 jobs in July alone, with significant additions in office-based business and customer-facing retail. This is an encouraging trend for investors in commercial real estate. The average hourly rate of pay also increased in July, resulting in a 2.6 % increase over the last 12 months, and the rate of unemployment held steady at 4.9 %.

Continued strength in hiring and expanding office-using payrolls stand to drive net absorption of 86.5M square feet, reducing vacancy to 14.8%. Simultaneously, new openings by retailers resulted in net absorption of 24M square feet and reduced vacancy to 5.8%.

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