What’s happening in commercial real estate is far from a recovery but all of the major sectors are nevertheless seeing improvement, particularly multifamily housing, which has been benefitting from tough times in the home ownership market. Rents are rising, vacancies are dropping, and more improvement is expected next year.
Industrial and office properties are seeing improvement, too, but both still have a ways to go before what’s happening can be called a robust recovery. Retail is struggling the most. That’s not surprising given the retrenching we’ve been seeing among consumers, although that’s changed a little so far this holiday season with better-than-expected retail sales.
In any case, there’s reason for optimism going into 2012. Despite what’s happening in Europe, the U.S. remians on a path to recovery, albeit at a slow pace. In fact, the U.S., despite its exposure to Europe’s problems, stands to benefit somewhat in the short term as global investors look to the U.S. for stability while the European market works our its debt issues. Of course, long-term, the European problem is a global problem, so the U.S. benefits most if the European Union finds a way to head off defaults among its struggling member countries.
To learn what we can expect next year in commercial real estate, we sat down with NAR Chief Economist Lawrence Yun during the 2011 REALTORS® Confernce & Expo a few weeks ago. Excerpts from the interview are in the video above.