Commercial vacancies to decline slightly over next year
August 29, 2011
Commercial real estate vacancies have been slow to recover, reflecting wider economic stagnation in job growth and U.S. economic expansion, according to a report released Thursday by the National Association of Realtors.
Still, the NAR added, modest growth in the sector is expected over the next year, as demand begins to pick up alongside consumer sentiment and business hiring.
The group forecasts commercial office vacancy rates will decline by 0.3 percentage points from the third quarter of this year to the same period in 2012. In addition, NAR projected declines of 0.6 points in the industrial sector, 0.7 in retail and 0.9 points in multifamily rental properties.
"Many young people, who normally would have struck out on their own from 2008 to 2010, had been doubling up with roommates or moving back into their parents' homes," said NAR chief economist Lawrence Yun. "However, they've been entering the rental market as new households in stronger numbers this year."
As a result, Yun added, apartment vacancy rates are falling inversely to higher rental rates.