Multifamily Still Rules
Multifamily and industrial top Real
Estate Research Corp.’s outlook for the major property types for the rest of
apartment market will continue to present low risk compared to the other
property types, given its strong fundamentals and the nation’s demographic
needs. However, some properties are considered overpriced. In addition,
continued high unemployment levels and increases in rental rates, coupled with
low home prices and interest rates, will keep renter demand in check.
industrial sector should remain generally steady, as rents are up and
absorption is increasing. The increases are expected to continue in 2011, and
become more robust in 2012. With rising fuel costs, logistics companies and
shippers could move toward smaller distribution centers to maximize
fuel-efficient rail and to minimize trucking costs.
retail sales are likely to increase throughout 2011 and 2012 due to pent-up
demand by consumers, the retail property sector will remain risky, especially
with consumers directing more of their income to gas and food. The retail
sector is overbuilt, and vacancy will remain high throughout 2011 with asking
in the hotel sector were slated to improve, but the sector remains risky
because of its dependence on recreational travel (as well as business travel),
and with high fuel prices and increasing restaurant prices, many consumers are
already cutting back on summer vacations and other travel plans for the year.
- The office
sector is likely to remain risky, with the fundamentals generally weak.
However, new space completions are at a minimum, and vacancy and asking rents
are starting to improve.
To learn more about what’s ahead for commercial
real estate, read Ken Riggs’ complete Midyear Market Update in the July/August
issue of CIRE. Also find more
detailed discussion of current commercial real estate trends in the latest
issue of the RERC/CCIM Investment Trends