Commercial vacancy rates to decline: NAR

Though the commercial real estate market nationwide is stabilizing, most market-rate rents will remain soft except in the multi-family sector, according to the National Association of Realtors. Lawrence Yun, chief economist at NAR, said that a pullback in construction is helping stabilize the market. “Very limited construction of new commercial real estate over the past few years has essentially fixed the supply of available space,” he said. “This means vacancy rates could fall quickly from any increase in demand for commercial space.” From the first quarter of this year to the first quarter of 2012, NAR expects vacancy rates to decline .5 percentage points in the office sector, 1.3 points in industrial real estate, .1 point in the retail sector and .9 percentage points in the multi-family rental market. “Even with declining vacancy rates, rents are not likely to turn positive in most markets until next year, outside of multi-family rental properties,” Yun said. TRD