The National Association of Realtors says that there are positive underlying fundamentals that are continuing to support all of the main commercial real estate sectors in the US. Although in some areas growth has been tempered by a tight grip on the availability of loans and a slowing of job creation, there are positive signs.
Lawrence Yun, the NAR's chief economist, says the association's latest forecast for commercial real estate is somewhat mixed, with rent growth being slightly moderated by dampened demand. Robust trading with Asian nations, including China, and with Canada, Mexico and Brazil, means that industrial and warehouse spaces are doing better.
"Job creation in the second quarter was about half of what we saw in the first quarter, which is moderating demand in the office sector," said Mr Yun. "Industrial and warehouse space is holding on better because imports and exports have advanced. While exports to Europe generally are down, trade has been robust with India, China and other Asian nations, along with Brazil, Mexico and our strongest trading partner Canada."
Investment property in the multifamily market appears to be worth considering, as demand is high in this real estate field. Mr Yun said that rents are rising at a faster rate as the result of significantly higher demand for apartments. He added that even higher rents and lower vacancy rates would result from a return to "normal household formation".
Mr Yun went on to say that the only notable growth in new space in the commercial sector is multifamily. Some of the lending in this sector is being provided through government loans.