According to a February 2016 report published by the National Association of Realtors (NAR), commercial real estate markets appear poised to continue recent growth trends throughout the first half of 2016. In the fourth quarter of 2015, small markets experienced a leasing rate of 2.5 percent, a decrease in office vacancies of 14.3 percent, and a decline in retail vacancies of 12.9 percent. Large commercial real estate markets witnessed a similar increase, with industrial sales posting a 54 percent increase in year-over-year transaction volume. The NAR expects vacancy rates to continue their decline and commercial fundamentals to increase steadily throughout the first quarter of 2016. With the unemployment rate expected to dip well below 5 percent in 2016, office vacancies are expected to decrease to 13.4 percent by the end of the year. In light of fluctuations in the global financial markets, commercial real estate will likely maintain its status as an attractive investment opportunity, even in the face of low cap rates and rising interest rates.
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AuthorAn experienced real estate investor and co-founder of 37th Parallel Properties in Richmond, Virginia, Chad Doty has established himself as a leader in commercial multifamily real estate. Archives
January 2017
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