Need Office Space for Lease or Sale? OfficeFinder can Help find your next Office. Leasing Office Space Buying Office Space Membership Online Toolkit OfficeFinder Advisor

NAR on 2010 - Office Space Vacancy to Increase. Office Space Rental Rates to Decrease

Add comments

WASHINGTON, DC--(Marketwire - May 26, 2010) -  Vacancy rates continue to rise in most commercial sectors and are not expected to level out in most markets until the end of this year or early 2011, according to the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said there is one bright spot in commercial real estate. "The multifamily sector can expect increased demand as the economy creates jobs and new households are formed, likely in the second half of this year," he said. "However, the office, warehouse and retail sectors continue to experience the delayed effects of the recession. These sectors should see gradual improvement after jobs pick up and create additional demand for space, meaning a broader improvement in commercial real estate is likely in 2011."

The Society of Industrial and Office Realtors®, in its SIOR Commercial Real Estate Index, an attitudinal survey of nearly 700 local market experts,(1) confirms that significant fallout from the recession remains, but to a lesser extent.

The SIOR index, measuring 10 variables, increased 2.7 percentage points to 38.2 in the first quarter, compared with a level of 100 that represents a balanced marketplace. This is the second gain following nearly three years of declines; the last time the market was in equilibrium was in the third quarter of 2007.

Development activity remains at a standstill with nine out of 10 respondents saying that it is virtually nonexistent in their markets.

Looking at the overall market, commercial vacancy rates appear to be approaching a plateau, according to NAR's latest COMMERCIAL REAL ESTATE OUTLOOK. The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by CBRE Econometric Advisors.

Office Market
With an elevated level of sublease space available, vacancy rates in the office sector are projected to increase from 16.9 percent in the first quarter of this year to 17.6 percent in the first quarter of 2011, but should ease later next year.

Annual office rent is likely to fall 2.3 percent this year and decline another 2.1 percent in 2011. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is forecast to be a negative 24.6 million square feet this year and then a positive 25.5 million in 2011.

More on other property types...

Office Rental , Office Space , Office Space Negotiations , Office Vacancy Rate

0 responses to “NAR on 2010 - Office Space Vacancy to Increase. Office Space Rental Rates to Decrease”