Commercial Markets Showing Growth

Commercial real estate markets are seeing a decline in vacancy rates with modest rent growth, according to the National Association of REALTORS® quarterly commercial real estate forecast.

“Office vacancies haven’t declined much because total jobs today are still below that of the pre-recession level in 2007, but rising international trade is boosting demand for warehouse space,”Lawrence Yun, NAR chief economist. “Consumer spending has been favorable for the retail market, and rising construction is keeping apartment availability fairly even, though at low vacancy levels. That, in turn, is pushing apartment rents to rise twice as fast as broad consumer prices and average wage growth.”

National vacancy rates over the coming year are forecast to decline 0.2 percentage point in the office market, 0.6 point in industrial, and 0.6 point for retail; however, the average multifamily vacancy rate is unlikely to change, with that sector continuing to experience the tightest availability and biggest rent increases.

NAR’s latest Commercial Real Estate Outlook offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS, Inc., a source of commercial real estate performance information.

Read more at National Association of Realtors