NAR Forecasts Stability in Commercial Real Estate Sector
February 23, 2017
The National Association of Realtors (NAR) is predicting a stable near-term commercial real estate environment, according to its latest quarterly forecast for this sector.
NAR foresees office vacancy rates dropping by 1.1 percent to 12.1 percent over the coming year, while the vacancy rate for industrial space is expected to decline 1.3 percent to 7.1 percent and retail availability is expected to decrease 0.7 percent to 11.2 percent. However, the multifamily market’s vacancy rate over the next year is expected to stay mostly flat at 6.5 percent.
“Last year was the 11th year in a row of subpar GDP growth, but renewed corporate optimism leading to a focus on investment and a desperately needed boost in residential construction should pave the way for modest expansion this year of around 2.4 percent,” said Lawrence Yun, NAR chief economist. “Steady hiring and low local unemployment levels are finally supporting higher wages and increased spending, which in turn bodes well for sustained demand for all commercial property types … The positive direction for commercial real estate this year will be guided by the steadily expanding U.S. economy, which has legs to grow and continues to be one of the top economic performers and safest bets in the world.”
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