US commercial real estate sector 'expected to improve'

The US commercial property industry is expected to perform better in 2012 than it has done this year.

This is the prediction of the National Association of Realtors (NAR), which noted there are indications that an upturn for the sector is just around the corner.

Lawrence Yun, NAR chief economist, commented: "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."

He went on to say that there is likely to be less empty space in 2012, while there is the anticipation of rental growth.

Mr Yun pointed out that in some sections of the market where demand is strong - such as multifamily accommodation - there is the potential for substantial rental increases.

Vacancy rates in this part of the market are expected to fall from five per cent in the third quarter of this year, to 4.3 per cent by the end of December, the NAR revealed.

Earlier this month, the Mortgage Bankers Association published research showing that the number of loans issued in the three months from July to September 2011 in the commercial and multifamily market rose by 98 per cent compared to the same period in 2010.
 

Like this? Then share with your friends and colleagues!