Low vacancy rates and the impact of technology on the North American economy were the key topics of discussion at the 5th Annual North American Construction Forecast conference, held Oct. 24 at the National Press Club in Washington, D.C.
Bill Toal, chief economist for the Portland Cement Association, projected that US construction spending will dip about 1.9% in 2001 and then continue on an upward track, rising 1.3% in 2002. He noted technology and the “new economy” as the driving forces behind the construction industry, adding that the wave of new technology is having a more substantial impact on construction and the economy than the current administration.
Alex Larrick, chief economist for CanaData, shared optimistic views for Canadian real estate, singling out Ottawa, Calgary, and Toronto as particularly promising markets because of their low office building vacancy rates and booming energy, finance, insurance, and real estate industries. Vacancy rates are particularly low in Canadian suburbs, he noted, with Ottawas suburbs experiencing vacancy rates below 3%.
Ray Torto, principal and managing director of Torto Wheaton Research, pointed out that vacancy rates in the United States are also low and will likely become lower. As of the third quarter of 2000, vacancy rates were hitting 8.1% nationally, nearing the historic lows of 1985. The lowest rates were found in San Francisco, San Jose, New York, Seattle, Boston, and Washington, D.C., which were all less than 5%.
Like Toal, Torto believes that the high-tech industry is a primary driver of the market, as evidenced by the high submarket rent-growth in top technology cities such as San Jose, Boulder, San Francisco, Boston, Austin, San Diego, Dallas, Research Triangle, N.C., Washington, D.C., Middlesex/Somerseti/Hunterdon, N.J., and Orange County, Calif.
For more information, contact the North American Construction Forecast.
Based on a report from BOMA International
