NEW YORK (Reuters) – America’s $6 trillion of commercial property markets show no signs a U.S. recession is on the way, with builders, lenders and buyers treading cautiously after a soft first quarter, an industry economist said on Monday.

By contrast, before the Great Recession of 2008, Federal Reserve data show that real estate owned to generate income for investors grew annually at 15 percent or more before a dramatic drop.

Calvin Schnure, senior vice president at the National Association Of Real Estate Investment Trusts trade group, said in an interview in the Reuters Global Markets Forum online chat room that vacancy rates were low and building lagged market demand.

Here are excerpts from the chat:

Question: After an era of cheap money, shouldn’t the commercial real estate sector be overheating and putting the long-running U.S. expansion at risk?

Answer: Commercial real estate markets are a good signal for the overall economy, as real estate is highly cyclical. Activity slowed a bit in the first quarter, and rent growth was soft. But we don’t see the types of imbalances that typically precede downturns. New construction has been constrained, and vacancy rates are still low.

Q: What are you seeing in the real estate markets?

A: Recent activity is similar to the ebb and flow we often see in the economy. It makes sense, given all the global uncertainty last winter, that some people may have been hesitant to sign a deal. Developers are cautious, even with low debt interest rates. That’s a good sign.

Q: Retail surely must be an exception, with hundreds of shopping malls shuttered?

A: It’s important to distinguish between the haves and have-nots. Some malls are in high-income neighborhoods, and store space is still very much in demand. REITs tend to own the higher-quality malls. That doesn’t mean they are immune to store closures, but they have been able to refill space quickly. REITs have maintained high occupancy rates at malls, at 94.2%.

Q: Which commercial real estate sectors are growing best?

A: The data-center REITs face lots of demand from cell communications and cloud storage. Same thing with cell tower REITs, and the industrial REITs that help ship the goods bought online. All the residential sectors (apartments, manufactured homes, single-family rentals) are robust.

(This interview was conducted in the Reuters Global Markets Forum, a chat room hosted on that Eikon platform.)

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