November 24, 2003—The office, warehouse, retail, and multifamily real estate markets can expect overall improvement through 2005, according to a forecast released at the annual National Association of Realtors (NAR) Conference & Expo in San Francisco.
NAR says the commercial real estate market can generally expect absorption of space to rise and vacancy rates to decline over the next two years.
Specific forecasts include:
- Office vacancy rates in the fifty-four markets analyzed are expected to decline to 16.4 percent in 2004 from an estimated 17.7 percent in 2003.
- Net absorption of office space, which includes leasing of new buildings coming on the market as well as space in existing properties, is projected to rise to 114.3 million square feet from 37.9 million.
- Average office rents are expected to rise 6.3 percent next year and 5.0 percent in 2005.
- Warehouse net absorption is forecast at 55.2 million square feet in 2004, down from a projected 82.3 million 2003
- The national vacancy rate is expected to drop to 9.3 percent from 10.4 percent. Warehouse rents are seen to decline an average of 0.3 percent in 2004, but should rise 2.5 percent in 2005.
