WASHINGTON. DC – According to the latest Commercial Real Estate Outlook released by the National Association of Realtors (R), activity is slowing in leading commercial real estate sectors all in response to tightening credit and slow economic growth.
Lawrence Yun, NAR chief economist, acknowledges problems on Wall Street are affecting commercial real estate. “Although capital remains available for residential loans, the credit crunch is pronounced in commercial lending,” he said. “Combined with a slowing economy, the lack of credit is curtailing activity in the commercial real estate sectors. As a result, there’s been a slowdown in the net absorption of space, which is leading to higher vacancies and more modest rent growth.”
Patricia Nooney, chair of the Realtors(R) Commercial Alliance Committee, chracterized market conditions as complex. “We’re in an unusual situation where transactions are being curtailed not for lack of demand, but for serious challenges in obtaining financing,” she said.
Locally, the Cape Cod MA commercial real estate market has also experienced a clear drop off in sales transactions, a subject to be covered in my up coming Quarter III 2008 Market Report. Commercial leasing activity on the other hand appears to be the bright spot in the Cape Cod market.
The NAR forecast analyzes quarterly data in the office, industrial, retail and multifamily markets. The COMMERCIAL REAL ESTATE OUTLOOK is published by the NAR Research Division for the Realtors(R) Commercial Alliance. The RCA includes affiliate organizations such as the CCIM Institute, Institute of Real Estate Management, Realtors(R) Land Institute, Society of Industrial and Office Realtors(R), and Counselors of Real Estate.