Multifamily Sector Continues to Lead Commercial Real Estate Resurgence

All four sectors of commercial real estate continue to experience growth, but at different rates, thernNational Association of Realtors® (NAR) said today. The Association’s quarterlyrncommercial real estate forecast sees vacancy rates for commercial property</bdecreasing by 0.2 percentage point over the next year, but office vacancy ratesrnare unlikely to match the improvement in the retail and industrial sectorsrnwhere vacancies are expected to fall by 0.6 point.  Multifamily properties are alreadyrnexperiencing low vacancies with demand supporting rapid rent increases and thatrnis likely to continue.</p

Areas with the<blowest multifamily vacancy rates currently are New Haven at 1.9 percent;rnSyracuse, 2.0 percent; New York City and San Diego, at 2.1 percent each; andrnMinneapolis, 2.2 percent.</p

Vacancy rates in the office sectorrnare expected to decline from a projected 15.7 percent in the third quarter torn15.5 percent in the third quarter of 2014. rnThis translates to net absorption of office space, including new spacerncoming on line as well as existing space of 30.1 million square feet and 41.6rnmillion square feet respectively this year and next.  Rents for office space are expected tornincrease about 2.5 percent in 2013 and 2.8 percent in 2014.  </p

Currently the best markets forrnoffice space are Washington, D.C., with a vacancy rate of 9.7 percent; New YorkrnCity, at 9.8 percent; Little Rock., 12.1 percent; and Birmingham, 12.4 percent.</p

Industrial vacancy rates are likelyrnto fall from 9.3 percent in the third quarter of this year to 8.7 percent inrnthe third quarter of 2014. Net absorption of industrial space nationally isrnanticipated at 102.0 million square feet in 2013 and 105.8 million inrn2014.  Rents increases are anticipated atrn2.4 percent this year and 2.6 percent next year.  .</p

Perhaps reflecting Yun’s analysisrnthat international trade is bolstering the industrial sector, the lowestrnindustrial vacancy rates are all in coastal areas; Orange County, California, 3.8rnpercent; Los Angeles, 4.0 percent; Miami, 5.9 percent; and Seattle 6.4 percent.</p

Retail vacancy rates are forecast torndecline from 10.6 percent in the third quarter of this year to 10.0 percent inrnthe third quarter of 2014 with net absorption of retail space projected at 11.8rnmillion square feet in 2013 and 18.2 million in 2014. Rents should increase 1.5rnpercent and 2.3 percent in the next two years. rn</p

The healthiest retail markets includernSan Francisco with 3.9 percent vacancies, Fairfield County, Connecticut at 4.1rnpercent; Long Island, 5.0 percent; and Orange County, California at 5.5rnpercent.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.