May 29, 2012 by Admin ? ?
WASHINGTON, DC, May 24, 2012 (MARKETWIRE via COMTEX) ?
Shaking off a prolonged impact from the recession, fundamentals are
gradually improving in all of the major commercial real estate
sectors, according to the National Association of Realtors(R)
quarterly commercial real estate forecast. The apartment rental
sector has fully recovered and is growing.
The findings also are confirmed in NAR?s recent quarterly Commercial
Real Estate Market Survey, which collects data from members about
market activity.
Lawrence Yun, NAR chief economist, said new jobs are the key.
?Ongoing job creation, which is at a higher level this year, is
fueling an underlying demand for commercial real estate space,
assisted by a steady increase in consumer spending,? he said. ?The
pattern shows gradually declining commercial vacancy rates, with
consequential but generally modest rent growth.?
Yun expects the economy to add 2 to 2.5 million jobs both this year
and in 2013, on the heels of 1.7 million new jobs in 2011, assuming a
new federal budget is passed before the end of the year. ?Although we
need even stronger job growth, by far the greatest impact of job
creation is in multifamily housing, where newly formed households
striking out on their own have increased demand for apartment rentals
? this is the sector with the lowest vacancy rates and strongest
rent growth, which is attracting many investors.?
Rising apartment rents also are having a positive impact on home
sales because many long-time renters now view homeownership as a
better long-term option, Yun noted.
A large problem remains for purchases of commercial property priced
under $2.5 million. ?Our recent commercial lending survey shows that
there is very little capital available for small business, which is
significantly impacting commercial real estate transactions, although
funding is less restrictive for bigger properties.?
NAR?s latest Commercial Real Estate Outlook(1) offers 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.,(2) a source of commercial
real estate performance information.
Office Markets
Vacancy rates in the office sector are projected to
fall from 16.3 percent in the second quarter of this year to 16.0
percent in the second quarter of 2013.
The markets with the lowest office vacancy rates presently are
Washington, D.C., with a vacancy rate of 9.3 percent; New York City,
at 10.0 percent; and New Orleans, 12.6 percent.
Office rents should increase 2.0 percent this year and 2.5 percent in
2013. Net absorption of office space in the U.S., which includes the
leasing of new space coming on the market as well as space in
existing properties, is forecast at 24.7 million square feet in 2012
and 48.0 million next year.
Industrial Markets
Industrial vacancy rates are likely to decline
from 11.0 percent in the current quarter to 10.7 percent in the
second quarter of 2013.
The areas with the lowest industrial vacancy rates currently are
Orange County, Calif., with a vacancy rate of 4.7 percent; Los
Angeles, 5.0 percent; and Miami at 7.2 percent.
Annual industrial rent is expected to rise 1.6 percent in 2012 and
2.4 percent next year. Net absorption of industrial space nationally
is seen at 44.1 million square feet this year and 62.4 million in
2013.
Retail Markets
Retail vacancy rates are forecast to decline from
11.3 percent in the second quarter to 10.7 percent in the second
quarter of 2013.
Presently, markets with the lowest retail vacancy rates include San
Francisco, 3.7 percent; Fairfield County, Conn., at 4.0 percent; and
Long Island, N.Y., at 5.0 percent.
Average retail rent should rise 0.8 percent this year and 1.3 percent
in 2013. Net absorption of retail space is projected at 8.0 million
square feet this year and 21.9 million in 2013.
Multifamily Markets
The apartment rental market ? multifamily
housing ? is likely to see vacancy rates drop from 4.5 percent in
the second quarter to 4.3 percent in the second quarter of 2013;
apartment vacancy rates below 5 percent generally are considered a
landlord?s market with demand justifying higher rents.
Areas with the lowest multifamily vacancy rates currently are New
York City, 2.1 percent; Portland, Ore., at 2.3 percent; and
Minneapolis at 2.4 percent.
After rising 2.2 percent last year, average apartment rent is
expected to increase 4.0 percent in 2012 and another 4.1 percent next
year. ?Such a rent increase will raise the core consumer inflation
rate. The Federal Reserve, in turn, may be forced to raise interest
rates, possibly as early as late 2013.?
Multifamily net absorption is forecast at 215,900 units this year and
230,300 in 2013.
The Commercial Real Estate Outlook is published by the NAR Research
Division for the commercial community. NAR?s Commercial Division,
formed in 1990, provides targeted products and services to meet the
needs of the commercial market and constituency within NAR.
The NAR commercial components include commercial members; commercial
committees, subcommittees and forums; commercial real estate boards
and structures; and the NAR commercial affiliate organizations ?
CCIM Institute, Institute of Real Estate Management, Realtors(R) Land
Institute, Society of Industrial and Office Realtors(R), and
Counselors of Real Estate.
Approximately 78,000 NAR and institute affiliate members specialize
in commercial brokerage and related services, and an additional
232,000 members offer commercial real estate services as a secondary
business.
The National Association of Realtors(R), ?The Voice for Real Estate,?
is America?s largest trade association, representing 1 million
members involved in all aspects of the residential and commercial
real estate industries.
(1)Additional analyses will be posted under Economists? Outlook in
the Research blog section of Realtor.org in coming days at:
http://economistsoutlook.blogs.realtor.org/ .
(2)Beginning in the third quarter of 2011, NAR forecasts have been
generated based on historical data provided by REIS, Inc., and do not
correspond with prior historical information from previous forecasts.
This source permits coverage of additional metro areas than
previously reported.
The next commercial real estate forecast and quarterly market report
will be released on August 27 at 10:00 a.m. EDT.
Information about NAR is available at
www.realtor.org . News releases
are posted in the website?s ?News and Commentary? tab. Statistical
data in this release, as well as other tables and surveys, are posted
in the ?Research and Statistics? tab of
www.realtor.org .
For further information contact:
Walter Molony
202/383-1177
Email Contact
SOURCE: National Association of Realtors
http://www2.marketwire.com/mw/emailprcntct?id=0AEE6ECA79FE2951
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