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(Updates with multifamily vacancy in fifth paragraph.)
Feb. 24 (Bloomberg) -- Vacancy rates for commercial property from offices to warehouses will decline this year as the U.S. jobless rate falls, according to the National Association of Realtors.
“Vacancy rates are improving in all of the major commercial real estate sectors,” Yun, the group’s chief economist, said today in a report. “Sustained job creation is benefiting commercial real estate sectors by increasing demand for space.”
Industrial and retail properties will have the biggest decreases in vacancy rates, the Washington-based group forecast. NAR estimates decreases over the next year of 0.9 percent for retail, 0.8 percent for industrial, 0.4 percent for offices and 0.2 percent in the multifamily rental market.
The unemployment rate fell to 8.3 percent in January, the lowest in three years, and employers added 243,000 to payrolls, helping to fill commercial space. While property markets are improving, 71 percent of respondents to a Society of Industrial and Office Realtors survey said leasing is below historic levels. Office vacancies are at 16.4 percent and retail is at 11.9 percent, according to the NAR report.
Multifamily has been the strongest performing segment of commercial real estate as demand for apartments boost rents. The vacancy rate may fall to 4.5 percent in the first quarter from 4.7 percent, the report said. Levels below 5 percent are generally considered “a landlord’s market.”
Areas with the lowest multifamily vacancies are New York City with a 1.8 percent level, and Minneapolis and Portland, Oregon at 2.5 percent, NAR reported.
--Editors: Pierre Paulden, Christine Maurus
To contact the reporter on this story: Christine Harvey in New York at Charvey32@bloomberg.net
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