A new report from CBRE shows that the U.S. commercial real estate market showed improvement across all sectors as vacancy rates in the second quarter of 2012. With office building vacancies at its lowest level since 2009 during Q2, the 15.7% vacancy rate "is still well above its pre-recessionary low of 12.4% and the recent headwinds facing the office markets have not gone away,” said Jon Southard, Managing Director, CBRE.
The office and industrial market summaries from the report follow:
Office Market
The national office vacancy rate fell by 30 bps to 15.7% in Q2 2012 marking the first quarter since 2009 in which the vacancy rate has been below 16%.
The national suburban vacancy rate fell by 40 bps while the national downtown vacancy rate fell by 20 bps. Occupancy improved in almost two-thirds of markets nationwide. Vacancy rates fell by 100 bps or more in seven markets: Albuquerque, Boston, Charlotte, Norfolk, Richmond, San Diego and Seattle. Technology and energy driven markets continued to be among the top performers as vacancy rates in San Francisco, Houston, Seattle and San Jose fell by 50 bps or more in the second quarter and remain well below their year-ago vacancy rates.
Industrial Market
Q2 2012, with an availability rate of 13.2%, is now the eighth consecutive quarter in which industrial availability has declined. During the quarter, 34 markets reported falling availability rates, 18 reported increases, and eight reported no change. Among large markets, Indianapolis (-130 bps) Memphis (-120 bps), Detroit (-100) and Seattle (-60bps) all saw significant drops. Chicago and Riverside were both down by 50 bps while, Los Angeles, the nation’s second largest market after Chicago, reported a decrease of 20 bps. With most markets reporting improvement in availability rates, it appears that slowing but continuing economic growth, is still leading to increased demand for industrial space.
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