NAR 2012 Commercial Outlook: Vacancies Down, Rentals Rise Expected
Released today was the February 2012 edition of Commercial Real Estate Outlook from NAR Commercial. Among the tables and graphs, report author George Ratiu, Manager of NAR Commercial Research sees a 2 to 3 percent general economic recovery rate and reports two CRE findings:
Vacancies were down 1Q 2012
Beyond the decline in vacancies, job growth is a key driver of the demand for commercial space. Economists are forecasting a an increase in payroll jobs in the neighborhood of 2 to 2.5 million for the next two years based on GDP growth in the 2 to 3 percent range. A continued recovery for the commercial sector is projected in NAR’s February edition of the Commercial Real Estate Outlook.
Rental rates are expected to rise
As the economic recovery continues in the 2 to 3 percent range rental rates are projected to increase in both the residential and commercial sectors. Commercial space completions have been below absorption, and demand for commercial space has started to increase. Based on the currently available economic forecast, a modest rent growth for the commercial sector is projected.
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