From Realtor Magazine Online, Daily Real Estate News January 6, 2009
It will likely be a challenging year for all kinds of commercial real estate, according to the real estate services company and investment firm Grubb & Ellis Co., which released its 2009 forecast Monday.
Office space. The report found that 90 million square feet of office space was under construction at the end of 2008, most of which will be available for use in 2009. This new space combined with a projected 45 million square feet coming available as tenants vacate and a big jump in subleased space, will push vacancy rates up by 2 percentage points to end 2009 at 16.5 percent, the report predicted.
Retail. The retail real estate market will be hard hit by the downturn. Grocery store-anchored centers in mature trade areas will hold their ground in 2009, the report said, while centers on the urban fringe, where housing construction has stalled will suffer.
Industrial. The quest for cost-saving efficiencies should sustain demand for industrial space in 2009, despite the weak economy, according to the report. Nevertheless, the vacancy rate will rise slightly to end 2009 at 9.4 percent.
Apartments. Apartments will have a tough year, even with the addition of renters who have lost their homes to foreclosure, because of the increasing supply of unsold condos and homes now available for rental.
The top-10 rental housing markets from 2009-2013 will be:
Los Angeles
San Francisco
Orange County, Calif.
Oakland/East Bay, Calif.
Washington, D.C.
San Diego
New York City
San Jose, Calif.
Long Island, N.Y.
Portland, Ore.
Source: Grubb & Ellis (01/05/09)
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