A slowdown in job creation and a lack of loan availability have hampered growth in some areas of the commercial real estate industry, according to a new report by the National Association of Realtors (NAR).
According to NAR, vacancy rates in the office sector are expected to fall from an estimated 16.1% in the third quarter of this year to 15.6% in the third quarter of 2013, while industrial vacancy rates are forecast to decline from 10.7% to 10.5% in the same period. NAR also forecasts that retail vacancy rates will decline from 10.9% in the third quarter of this year to 10.7% in the third quarter of next year, while the multifamily housing sector has the potential to see vacancy rates drop from 4.3% to 4.2% in the same time frame.
‘The difficulty small businesses have in getting commercial real estate loans for leasing or purchase is keeping a lid on demand,’ says Lawrence Yun, chief economist at NAR. ‘Multifamily is the only commercial sector with a notable growth in new space, with some lending provided through government loans.’
Yun adds that a stagnant employment picture is also holding back a full recovery. ‘Job creation in the second quarter was about half of what we saw in the first quarter, which is moderating demand in the office sector,’ he says. ‘Industrial and warehouse space is holding on better because imports and exports have advanced.’