US Commercial Real-Estate Development Still Stagnant - Realtors Group
First Published Thursday, 26th August 2010 02:17 pm - © 2010 Dow Jones
By Meena Thiruvengadam
Of Dow Jones NEWSWIRES
WASHINGTON -(Dow Jones)- The commercial real estate sector continues to struggle even though landlords across the country are offering concessions and rent discounts, the National Association of Realtors said Thursday.
A gauge of the commercial real estate sector released by the group stood at 41 in the second quarter, up 2.8% in the quarter but still far below the 100 the NAR said represents a balanced market.
The NAR said 88% of its survey respondents said commercial real estate development was "virtually nonexistent in their markets."
Still, the data shows "development acquisitions are beginning to grow in many areas in what is described as a buyer's market," the NAR said
The NAR is forecasting office vacancy rates to rise to 17% in the second quarter of 2011. It expects annual office rents to fall 2.7% this year and 2.1% in 2011.
Meanwhile, the NAR is expecting industrial vacancy rates to dip to 13.7% in the second quarter of 2011 as rents drop 5.4% this year and 4.7% in 2011.
The NAR expects retail vacancy rates to stay steady at around 13.1% and expects demand for multifamily housing to continue rising.
-By Meena Thiruvengadam, Dow Jones Newswires; 202-862-6629; firstname.lastname@example.org