U.S. commercial real estate industry growing

Posted on August 1, 2013

The commercial real estate industry in the U.S. continued to show a steady pace of growth in the first half of 2013, according to the CCIM Institute.

The institute’s Quarterly Market Trends report, produced in partnership with the National Association of Realtors (NAR), showed improving fundamentals, with declining vacancy rates and rising rents across the four property sectors (office, industrial, retail and multi-family).

In the second quarter, office vacancy rates hit 15.7 per cent, with a 2.6 per cent rise in rental values. Industrial vacancy saw a drop of 9.4 per cent and a rise in rents of 2.4 per cent.

Consumers spent more in the second quarter, shown in the increased demand for retail space. Retail availability reached 10.5 per cent, while rents grew by 0.4 per cent.

The report projects apartment vacancy rates will reach 3.8 per cent by the end of the year, and rents will rise 4.6 per cent.

“Given the positive increases in demand and steady economic performances, commercial fundamentals will likely stay the recovery course,” says George Ratiu, manager of NAR’s quantitative and commercial research. “With demand for rental housing projected to remain strong and moderate gains in employment and consumer spending, absorption for office, industrial and retail spaces will continue rising, pushing vacancy rates lower.”