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NAR predicts steady growth and falling vacancies in 2017

On Behalf of | Mar 6, 2017 | Commercial Real Estate |

Commercial real estate markets in California and around the country will provide investors with steady returns in 2017 according to the National Association of Realtors. Some industry experts feel that the current market cycle is nearing its peak, but the real estate trade association does not foresee any major setbacks in the year ahead. The group says that smaller markets were particularly active in late 2016, which compensated for falling prices in some of the nation’s larger cities.

Vacancy rates are expected to fall in most commercial real estate sectors, and the competition for industrial space is expected to be particularly fierce. Even beleaguered retail landlords can expect demand to increase as 2017 wears on, and the NAR says that multi-family vacancy rates will remain steady despite large amounts of new supply. Property owners will benefit from an economy that will continue to grow and create jobs according to the NAR, and year-over-year prices that were up 8.5 percent in February add weight to the trade group’s position.

The Federal Reserve has voiced concerns over rising commercial property values, but the National Association of Real Estate Investment Trusts disagrees. The group feels that demand will remain high because companies continue to take on new workers and construction levels are well below previous peaks. However, NAREIT does concede that the current market cycle is maturing.

Commercial property developers and investors must often act quickly when opportunities present themselves, but unforeseen legal issues can cause negotiations to grind to a halt. Attorneys with experience in this area may be able to identify potential hurdles well in advance and develop strategies to avoid them. Attorneys could also help commercial landlords to avoid protracted legal disputes by checking the references of potential tenants.