CBRE Reports Commercial Real Estate Prospects for Rest of Year are Mixed

BOSTON, MA--Prospects for commercial real estate during the balance of this year remain mixed.

"Back from the Brink... But What Next?," a new Global MarketView issued by CB Richard Ellis Research and Consulting, sees some stabilization and recovery for the commercial real estate market at the mid-point of 2009.

The report notes the obvious indicators of weak market conditions but also identifies some positive developments, including initial signs of recovery in some regions.

Summary

There has been an uptick in investment sales volume in Asia, where the market has adjusted quickly and pricing may have hit bottom in some cities in Q2. However, overall prime office rental rates in Asia dropped in Q2 and a number of office markets continued to record negative net absorption and falling occupancy rates.

In the Pacific, there were signs that property markets was stabilizing after 18 months of turmoil caused by the global financial crisis. Some larger investment transactions are finally taking place; the amount of sublease office space coming onto the market is slowing; and both consumer and business confidence measures are now improving.

Activity in the EMEA investment market inched up to €13 billion, from €11.6 billion in Q1 2009. While it is too early to predict a sustained upturn, there is some expectation that Q4 could see a modest further improvement in transaction volumes. However, office leasing activity in the main European markets is still very subdued.

Vacancy rates in the U.S. office, industrial and retail property markets continued to rise in Q2 2009. The U.S. office vacancy rate increased by 80 bps during Q2 2009 to 15.5%, while the national industrial availability rate increased 80 bps during Q2 2009 to 13.0%. However in Canada, office vacancy rose at a slower rate then in the U.S.

The report was prepared by Nick Axford (middle right photo), Andrew Ness middle left photo), Kevin Stanley (bottom left photo), Raymond Wong (top left photo) and Raymond Torto (top right photo).

For further details on the CBRE report, please contact
TL-ZZkiJ683193t7394CP00@cbremarketing.com or rtorto@cbremarketing.com