Commercial real estate market
Due mostly in part for demand in the multifamily sector, commercial real estate market is showing signs of stability, according to a report by market ratings company Moodys.com.
Overall, the commercial real estate market’s current ranking is now at 67 out of 100 points, up three percent. The highest ranking sector in commercial real estate is currently the multi-family sector which scored an impressive 88 out of 100, the highest score of the first quarter report.
Market conditions improved in the first quarter of 2011 and Moody’s projects that the commercial real estate sector will continue on a positive trend. The report notes that commercial space is being leased at a rate that could exceed the rate of increase in supply. The projection that this gap could be closed is welcome news in the industry.
“Scores for the central business district and suburban office markets rose moderately, while those for the multi-family, retail, and industrial markets were consistent with the previous quarter, ” Senior Moody’s Credit Officer, Keith Banhazl said.
Retail and office space
Retail remained unchanged at 64 points, led by San Francisco’s 88 point ranking. Office space vacancy rose slightly in the first quarter, but Moody’s ranked office space in cities’ central business districts with 70 points, up 5.7% from 2010.
Regional hot spots
There were some spots across America that Moody’s highlighted as hot spots from Fort Worth, TX and New York City with the top ratings in commercial real estate with a score of 87 with Washington, D.C. remaining at 81 points.
The multi-family sector’s top scoring market was led with Newark, NJ, Miami, and Portland with top rankings over 94 points while suburban office markets jumped up four points to a still low 52, led by Nashville’s top score of 78. Moody’s reports that Detroit and Las Vegas scored the lowest in this sector, struggling at 17 points. Industrial properties were given a 61 point score by Moody’s as vacancies are slowly dissipating.
In a sector that has seen difficult times in recent years, improvement in commercial real estate is a healthy sign for the industry overall.
