Commercial real estate markets in California and around the country should continue to provide investors with solid and steady returns in the months ahead according to figures released by NAI Global. The New Jersey-based brokerage firm came to this conclusion after studying vacancy and rent trends in 21 major U.S. markets. According to the company’s second quarter assessment, vacancy rates in the industrial, office and retail sectors are hovering near or at lows not seen in years, and rents continue to increase in most markets even in the much-maligned retail segment.
Office rents bucked the trend by falling slightly in the second quarter, but the NAI Global report reveals that this was caused by noticeable declines in Chicago and New York. Rents in all of the other 19 markets studied increased during the period. Office vacancy rates were unchanged at 9.6 percent, and absorption in the industrial sector actually increased along with rents despite falling in 12 markets.
However, industry insiders may be most surprised about the retail sector figures. The decline of traditional brick-and-mortar retailers has been a common topic, but the NAI Global data shows that retail vacancies are hovering around pre-recession lows and rents are actually inching upwards. Retail rents increased by 1.8 percent in the first quarter and 1.6 percent in the second, and vacancy rates of 4.8 percent were posted in three of the last four quarters.
Taking advantage of emerging commercial real estate market trends can be challenging for developers. Shortages of space can prompt a wave of construction activity, but developers who fail to complete their projects in a timely manner may miss out on these opportunities. Attorneys with experience in construction issues may be able to help developers to avoid this fate by addressing zoning, regulatory and legal issues promptly to keep projects on track and prevent costly delays.