Friday, October 29, 2010

Commercial Real Estate: "Normal market conditions years away"

by Calculated Risk on 10/29/2010 10:03:00 PM

From Buck Wargo at the Las Vegas Sun: Commercial real estate’s slide likely at an end

The commercial real estate market led by the office sector appears to have halted its slide ... analysts said.
...
With little construction and the demand for space outpacing those who are giving it up, it appears the office market isn’t going to worsen, [Jake Joyce, a project manager with Applied Analysis] said.

“While it’s easy to latch on to even the smallest bright spot, the return to more normal market conditions is years away, but must start somewhere,” Joyce said.
It is possible the office vacancy rate has peaked - or is near the peak as the the Reis vacancy data suggests - but it will take a long time to absorb all the excess office space. And that means non-residential investment in office buildings will be low for some time.

But you do have to start somewhere ...