WASHINGTON, DC, PRNewswire-USNewswire/ -- Commercial real estate market fundamentals are fairly stable, although investment is waning following a record year in 2007, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of Realtors(R).NAR Chief Economist Lawrence Yun (photo top left) said the commercial real estate market is holding essentially even. "We're seeing no significant changes in vacancy rates or rent growth, so the fundamentals in commercial real estate still seem to be respectable," he said.
"Under normal circumstances, near-full occupancy coupled with positive rent growth would be of strong interest to investors, but we're not seeing that. The credit crunch has filtered into the commercial real estate market."
Patricia Nooney of St. Louis, chair of the Realtors(R) Commercial Alliance Committee, said the investment cycle appears to be turning. "It looks like investors are taking a wait-and-see attitude," she said. "Even with fairly stable fundamentals and capital available from institutional investors, it appears investor confidence has declined, and some private investors have had problems obtaining financing. Commercial real estate investment set a new record in 2007, but now that we're in a period of economic uncertainty, transaction volume is likely to decline."
Investment in commercial real estate in 2007 was $427.2 billion, up 39.2 percent from the previous record of $306.8 billion in 2006; that total does not include transactions valued at less than $5 million or investments in the hospitality sector, based on analysis of data from Real Capital Analytics. NAR projects the investment dollar volume this year could
drop by 30 to 40 percent, comparable to 2006 levels.
drop by 30 to 40 percent, comparable to 2006 levels.The NAR forecast in four major commercial sectors analyzes quarterly data for various tracked metro areas. The sectors are the office, industrial, retail and multifamily markets. Historic metro data were provided by Torto Wheaton Research and Real Capital Analytics.
For a copy of the complete report, please contact:
Walter Molony,
1 202 383 1177
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