Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Commercial Real Estate

Commercial real estate forecast released by NAR

Commercial real estate markets stabilizing

According to the National Association of Realtors’ (NAR) forecast, real estate markets are stabilizing and demand is growing due to “the improving economy and job creation.” NAR forecasts that between now and the second quarter of 2012, vacancy rates will decline 1.0% in the office sector, 0.9% in industrial, 0.5% in retail and 1.1% in multifamily.

The Society of Industrial and Office Realtors (SIOR) surveyed with similar results showing a “firming up of market fundamentals.”

Lawrence Yun, NAR chief economist, said job creation will be the biggest factor moving forward. “Job growth creates demand for commercial space, and the economy should be adding between 1.5 million and 2 million jobs annually both this year and in 2012, with the unemployment rate falling to 8.0 percent by the end of next year.”

Yun’s optimistic view of the commercial sector opposes his somber tone regarding residential. “Given the minimal new supply in recent years, the rising demand means vacancy rates will be trending down in the commercial real estate sectors. Individual markets are now stabilizing and in some cases rising.”

Advertisement. Scroll to continue reading.


  • 65% of Realtors report lending conditions tightened in 2011.
  • “Just as in the residential sector, lending problems are the biggest issue impacting commercial real estate,” Yun said.
  • “Solid rises in apartment rents will force some renters to consider home ownership,” Yun noted.
  • Vacancy rates in the office sector are expected to fall from 16.3% in Q2 2011 to 15.3% in Q2 2012 and rents are forecast to rise 0.3% in 2011 and 4.3% in 2012.
  • Honolulu and NYC have the lowest office vacancy rates (below 9% each).
  • Industrial vacancies are said to drop 0.9% over the next year to 13.0%. Rents should drop 1.5% in 2011 but rise 2% in 2012.
  • LA and Salt Lake Cities have the lowest industrial vacancy rates at 7 to 8%.
  • Retail vacancies should drop from 0.5% over the next year and rent is projected to drop 1.4% in 2011 and rise 0.7% in 2012.
  • With vacancies under 8%, Honolulu, San Jose and Long Island have the lowest retail vacancy rates.
  • Multifamily vacancies should drop from 5.8% nationally to 4.7% by Q2 2012 and rents should rise 3.4% in 2011 then 4.3% in 2012.
  • San Jose, Portland and Pittsburgh have the lowest multifamily vacancy rates around 3%.

Click here for the full NAR forecast report.

The American Genius is news, insights, tools, and inspiration for business owners and professionals. AG condenses information on technology, business, social media, startups, economics and more, so you don’t have to.



  1. Rob Beland

    June 11, 2011 at 5:30 pm

    “Solid rises in apartment rents will force some renters to consider home ownership,” Yun noted.
    Isn't the inability of people to qualify for a mortgage what is driving the rental market resulting in higher rents? That statement seems backwards to me. If people could qualify for a mortgage they wouldn't be paying the higher rents…

Leave a Reply

Your email address will not be published. Required fields are marked *


American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.



Business News

(REAL ESTATE NEWS) NAR CEO Dale Stinton is set to retire after his successor is named. Stinton is known for his steady leadership and...

Tech News

ICANN, the governing body over all top-level domains (.com, .gov, .edu) has partnered with the National Association of Realtors which has obtained the .REALTOR...

Housing News

(Housing) NAR's Board of Directors meeting has just ended, and four policy recommendations were approved, including a new Code of Excellence and a path...

Housing News

(Housing) Realtors are tasked with being up to date on endless information, and attending the annual REALTORS Conference and Expo is a fast way...

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.