As the economy continues to show signs of weakness, a new report from CB Richard Ellis Inc. indicates that occupancy is down across all major sectors of commercial real estate. And should the economy continue to struggle, there isn’t likely to be a recovery anytime soon. \u201cCommercial real estate evolves along with the economy,\u201d Jon Southard, director of forecasting for Eonometric Advisors, a division within CBRE, told CPN. \u201cAs far as what it means for the rest of the year, I\u2019m not so sure it means a continuation.\u201d The rate of vacancy increase is notable, with the rates for the four commercial real estate sectors rising by 40-80 basis points in the first quarter of 2009 based on data compiled by CBRE Econometric Advisors.\u201cI think, certainly, people in the market were not surprised by increases this great,\u201d Southard said. \u201cIt feels bad out there. This confirms that things are in lousy shape as it pertains to demand across property types. It confirms the frequently heard view that this is the worse downturn since the Great Depression in the terms of demand.\u201d The U.S. office vacancy rate rose to 14.7 percent, an increase of 70 basis points, at the end of the first quarter. Both downtown and suburban office markets experienced an increase in vacant space, suggesting that declining demand is now affecting central business districts and outlying suburbs alike. The downtown vacancy rate increased 80 basis points to 11 percent, marking the highest level since the second quarter of 2006. Suburban vacancy also rose by 70 basis points to 16.7 percent, marking its seventh consecutive quarterly increase. The national office vacancy rate is still well below the high of 19.1 percent set in 1991, the report stated. Meanwhile, the national industrial availability rate increased 80 basis points to 12.2 percent in the first quarter of 2009, marking the sixth consecutive quarter of rising availability and the highest availability rate since CBRE Econometric Advisors began tracking data on the industrial market in 1989. Nearly all of the geographic markets tracked by the report, 58 out of 62, showed availability increases over the previous quarter. (Availability is space that is actively being marketed and available for tenant build-out within 12 months.) Retail availability rate rose to 11.5 percent, an 80 basis-point jump from the prior quarter. Economic conditions continue to place strain on retailers in neighborhood and community centers, which failed to bounce back in the first quarter, following a very poor holiday shopping season, the report said. Fundamentals in the retail sector continue to deteriorate as consumers continue to rein in their spending, including necessity spending. Finally, the U.S. multi-family sector also saw poor performance in the first quarter. The vacancy rate for CBRE Econometric Advisor’s nationwide same-store sample of 3 million professionally-managed apartment units increased to 7.3 percent in the first quarter of 2009, a 40 basis-point increase from last quarter. This marks a new high for the national multi-family vacancy rate. \u201cFor three of the property types, we have significant increases in vacancy and we\u2019re reaching highs higher than the 1990s bust, which everyone remembers as a benchmark for bad times in commercial real estate,” Southard said. “The exception there is office, which is anticipated to get to a high higher than that ’90s bust.\u201d Southard said the federal government’s stimulus effort may have some impact. \u201cAll the firepower makes a difference in terms, not projects per se,\u201d he said. \u201cThe stimulus is one of a great number of programs now thrown out to combat the recession. We think it will make a difference in things being less bad as the year goes on. We\u2019re starting to see some of that in broader economic measures in housing and retail sales and to the extent that the stock markets are starting to rebound.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
As the economy continues to show signs of weakness, a new report from CB Richard Ellis Inc. indicates that occupancy is down across all major sectors of commercial real estate. And should the economy continue to struggle, there isn’t likely to be a recovery anytime soon. \u201cCommercial real estate evolves along with the economy,\u201d Jon…<\/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-1003962155","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n