"Bright Spot In The Economy"

Posted by: Toddi Gutner on June 16, 2006

It is no surprise that the residential and commercial real estate markets are intimately connected. What befalls the residential market typically cycles through the commercial markets, but with up to an 18-month lag. Still, a recent National Association of Realtors report on the commercial real estate market states that strong demand, limited supply and solid fundamentals make this sector a “bright spot in the economy.”

Harvey E. Green, president and ceo of Marcus & Millichap, a commercial real estate brokerage company in Encino, Ca. concurs. Green argues that the lag in this real estate cycle between the residential and commercial market will be much longer than 18 months.

Why? “Much of the vacant space from the Tech Wreck has been absorbed and yet there have been natural brakes in supply as construction costs climb,” he says. One result, he says, is that this year has seen the strongest rental growth in the office, retail and industrial markets since 2000. “Unless something spooks the underlying markets, rents should continue to grow,” he says. Lets hope he is right.

Reader Comments

garrett

July 28, 2008 8:56 PM

If you want to check out a funny video about the current rental market and the type of company looking around for commercial space, check out

www.rofo.com/video

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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