Commercial Markets Stabilizing

Commercial real estate markets are flattening out, with modestly improving fundamentals expected in 2011, NAR says. ‘œThe basic fundamental of rising commercial leasing demand, resulting from a steadily improving economy, means overall vacancy rates have already peaked or will soon top out,’ says NAR Chief Economist Lawrence Yun. ‘œThe outlook for the office and industrial markets has moderated with modestly declining vacancy rates expected as 2011 progresses, while the retail sector should hold fairly steady. Still, high vacancy rates imply falling rents.’ Yun anticipates a rise in household formation from an improving economy, which will increase demand for housing, both ownership and rental.