Commercial Real Estate Remains Soft but Favors Business Expansion

According to the National Association of Realtors, Commercial real estate sectors, hurt by weak job growth, are offering incentives in many areas that are conducive to business expansion. NAR Chief Economist, Lawrence Yun, said fallout from the recession continues to impact commercial real estate.

In its SIOR Commercial Real Estate Index, The Society of Industrial and Office Realtors shows vacancy rates are beginning to level, but rents remain depressed, and subleasing space is high. Measuring 10 variables, the SIOR index rose 2.8 percentage points to 41.0 in the second quarter, but remains well below a level of 100 that represents a balanced marketplace. This is the third consecutive quarterly improvement.

Commercial real estate development remains stagnant in all regions with low investment activity, but development acquisitions are beginning to grow in many areas in what is described as a buyer’s market. According to NAR’s latest Commercial Real Estate Outook, vacancy rates will shift modestly in the coming year.

CLICK HERE to view this article in its entirety.