Commercial Real Estate Continues to Rebound
Office Market is Rebounding as commercial real estate fundamentals continued to strengthen in the second quarter of 2011, albeit at a much more moderate pace than the end of last year. Cord Moving and Storage headquartered in Saint Louis, MO an agent for North American Van Lines reports based on many different reports issued nationally that the temperate recovery is consistent with global economic trends, which softened in the first half of the year in the face of the Japanese earthquake and the oil-price shock.
While the economy continues to face challenges – including a struggling housing market, anemic job growth, and federal and state fiscal pressures – economic growth is expected to pick up in the second half of the year as energy prices ease and global supply chains are restored. As the economy gathers momentum, the CRE recovery should also accelerate, according to Kevin White, a real estate strategist. This office market rebound is based on initial quarterly findings, office fundamentals continued to improve during the second quarter. Although demand was not as robust as previous quarters, the fact that supply additions hit a 10-year low helped to support the eight-basis-point decline in vacancy.
As was the case during the first quarter, preliminary second quarter absorption came in short of expectations, as continued macroeconomic uncertainty caused enough uneasiness among business owners for them to delay leasing decisions. “The office market posted its fifth consecutive quarter of positive net absorption while speculative space under construction reached more than 9.8 million square feet,” noted Chris Macke, senior real estate strategist for after analyzing preliminary numbers. “Second quarter net absorption increased to more than 12 million square feet, a more than 39% increase from the previous quarter’s net absorption of 8.7 million square feet.”