Us commercial property on the up

Photo: Beltz6

Economic activity has been mixed so far during 2014, but confidence in America's commercial real estate has improved significantly, with leading experts expressing positive sentiments during the Commercial Economic Issues & Trends Forum at the 2014 Realtors Conference & Expo.

National Association of Realtors Chief Economist Lawrence Yun comments: "The commercial real estate market ordinarily recovers two years behind the economy but not this cycle. It has taken four years and, fortunately, this year we turned a corner.”

Improving employment figures are the main driver behind rising company demand, says Yun: "More jobs mean more demand for office space, warehouse space, retail spaces and other commercial spaces. With the economy expanding, commercial activity should be rising.

“The need for office space is really just starting to become apparent, and multifamily units are still going strong," adds Richard M. Gatto, executive vice president of The Alter Group

With rent prices continuing to rise and vacancy rates continuing to decline, all of the panelists agreed that the multifamily market should continue to see growth well into 2015 and beyond.

The general trend is decreased vacancy and increased rent growth, which is also notable in the office sector, thanks to the growing urbanisation of suburbs.

While the mood is positive, though, Yun cautions that the recovery is only beginning and still has some way to go.

"Do not expect the recovery to occur over night," he comments. "It will not be a big bang; it will be a steady and gradual increase in demand."