Us commercial real estate market expected to improve in 2012

Commercial real estate markets in the United States have been relatively flat this year, but improving fundamentals mean a more positive trend is expected in 2012, according to the National Association of Realtors.

Lawrence Yun, NAR chief economist, said there is little Change in most of the commercial market sectors. ‘Vacancy rates are flat, leasing is soft and concessions continue to make it a tenant’s market. However, with modest economic growth and job creation, the fundamentals for commercial real estate should gradually improve in the coming year,’ he explained.

The commercial real estate market is expected to follow the general economy. ‘Vacancy rates are expected to trend lower and rents should rise modestly next year. In the multifamily market, which already has the tightest vacancy rates in any commercial sector, apartment rents will be rising at faster rates in most of the country next year. If new multifamily construction doesn’t ramp up, rent growth could potentially approach 7% over the next two years,’ Yun added.

Looking at commercial vacancy rates from the fourth quarter of this year to the fourth quarter of 2012, NAR forecasts vacancies to decline 0.6% in the office sector, 0.4% in industrial real estate, 0.8% in the retail sector and 0.7% in the multifamily rental market.

Source: PropertyWire.com