US real estate experts continue to relay that the US commercial real estate market is showing continued signs of strength across all real estate groups through the first quarter of 2015…
However the pace is employment hiring will affect the continued increase. In March there was a relative lag to job hiring and if that continues then markets with a high level of new construction could see a trending down of vacancy rates.
Some highlights from the US commercial real estate market in Q1 include:
- National industrial availability dropped a full percentage point from a year ago to 10.1%.
- Retail demand was still strong with availability at 11%.
- The office vacancy rate declined by 10 basis points from the previous quarter to 13.9% in Q1 2015. The rate is now the lowest since 2008. Touring activity is up in most major markets, and construction activity has increasing as well.
- Apartment vacancy rates were incredibly low as demand remains very strong. Vacancy is reported at 4.5% in Q1 2015.
The US office market continued in Q1 2015 with its strong performance. Vacancy rates fell in 41 of 62 markets and rose in 18. Absorption was very strong, led by suburban markets where there was a decline nationally to 15.4%. In many downtown markets the performance was mixed but overall the vacancy rate rose a slight bit to 11.2%.
Markets in the West and the South have seen the most improvements and the lowest vacancy is in San Francisco and Austin (7.1% and 7.9% respectfully).
The next few quarters will be a time to see if the continued overall strong market dynamics remain. Job growth, interest rates and overall corporate demand will pave the way for the rest of 2015.
(Statistical data from www.worldpropertyjournal.com)