The National Association of Realtors expects the commercial real estate market in the US to remain steady this year as demand grows in smaller markets, reported Forbes.
In its quarterly report, the association said it expects national office vacancy rates to drop by 1.1 percent to 12.1 percent, as job growth brings increased need for office space. The industrial vacancy rate is also predicted to fall by 1.3 percent to 7.1 percent, while retail vacancy rate will decline by 0.7 percent to 11.2 percent.
The forecasts are no different from that of other economists. Although the cycle may have hit its peak, slow growth will continue to support the commercial real estate industry.
Meanwhile, the National Association of REITs expects the commercial real estate market to remain strong this year, on the back of strong economics and more leasing demand. Ten-X’s CRE Nowcast, on the other hand, showed that commercial real estate pricing is up 8.5 percent in February from the previous year, albeit slow growth this year.
Lawrence Yun, chief economist at National Association of Realtors, said the US economy could witness slight improvement through low unemployment and steady hiring leading to higher wages and increased spending – factors that support commercial real estate demand.