The National Association of Realtors has released preliminary information from its upcoming report on the state of the commercial real estate industry that asserts that times are tough, but not as tough as during the recession of the early 2000s. Its essential findings are that commercial real estate vacancies are trending up modestly, while investment has dropped sharply in the wake of the credit crunch. In the office market, the NAR report projects that office vacancy rates will increase to 13.7 percent nationally in the fourth quarter of this year, compared with 12.5 percent in the fourth quarter of 2007, spurred by new inventory coming on line in 2008. As a result, annual rent growth in the office sector is expected to be only 3 percent this year, following an 8 percent jump in 2007. The NAR report also says that demand for warehouse space has fallen because of the economic slowdown, although the demand for light manufacturing space has risen slightly because the weak U.S. dollar is stimulating manufacturing exports. Even so, overall vacancy rates in the industrial sector are forecast to rise to 9.9 percent in the fourth quarter of this year, up from 9.4 percent in the same period of 2007. Annual rent growth should be 1.2 percent by the end of the year, down from 3.6 percent in the fourth quarter of 2007. Retail spending has been hurt by high energy prices, but retail development has also slowed down considerably, so according to the report vacancy rates in the retail sector will probably edge up to 9.3 percent in the fourth quarter, up from 9.2 percent in the fourth quarter of 2007. Average retail rent is expected to rise 1.3 percent in 2008, compared with a 2.9 percent gain last year. As for investment sales of commercial real estate properties of all kinds, the credit crunch and the slowdown in the economy have hit transaction volume pretty hard, the report says, confirming well-known market trends in investment. Investment in commercial real estate during the first four months of 2008 was $48.2 billion, down 69.5 percent from $157.8 billion during the same period in 2007, before the onset of the credit crunch.<\/p>\n","protected":false},"excerpt":{"rendered":"
The National Association of Realtors has released preliminary information from its upcoming report on the state of the commercial real estate industry that asserts that times are tough, but not as tough as during the recession of the early 2000s. Its essential findings are that commercial real estate vacancies are trending up modestly, while investment…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003818715","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n