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Commercial real estate vacancy rates continue to fall

Commercial real estate vacancy rates in Pennsylvania and around the country are expected to fall to below 12 percent by the end of 2017 as the nation's economy continues to grow and add jobs. Economic growth during the last quarter was a robust 3 percent, and the National Association of Realtors believes that even the beleaguered retail sector will benefit as a result. Retail vacancies are expected to drop by 0.4 percent by the end of 2017 while the amount of industrial space available is set to fall by 1.1 percent.

However, falling commercial real estate vacancy rates may not lead to lower prices in all parts of the country. Industry experts say that foreign investors have been less active recently, and they believe this will cause prices to plateau in a number of key markets. Expensive projects in exclusive areas could feel the impact most as Class A properties have been especially popular with overseas buyers in recent years.

The NAR looks at national commercial real estate pricing and vacancy trends, but one of the group's senior economists pointed out that the regional picture can look very different. The demand for apartments will likely be fierce in areas affected by natural disasters like hurricanes Irma and Harvey, and investors in search of reliable returns may begin to eschew gateway cities in favor of secondary or tertiary markets.

Developers who fail to complete their projects on time can struggle even when the economy is performing well. Attorneys with experience in this area could help developers by anticipating the permit, zoning, environmental and land use issues that could cause work to grind to a halt.

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