According to the latest analysis from CBRE Group, the U.S. commercial real estate market withstood pressures from an uneven economic recovery in Q2 2012 and remained on a recovery path. With vacancy falling 10 basis points to 15.4% overall in the office markets, the suburbs outperformed downtown markets by a different of 10 basis points. An excerpt from the CBRE report:
Technology, software, and energy driven markets had the largest occupancy gains in 2012, with vacancy rates in San Jose, Austin, Boston and Houston falling by 200 bps or more. As in 2011, some housing-based or CANVFLAZ (California, Nevada, Florida & Arizona) markets were among the best performers last year, as tenants locked in low rents and expanded their office footprints. Vacancy rates in Phoenix, Miami, Orange County and Ventura fell by 150 bps or more in 2012.
"While the national office vacancy rate has fallen for the third consecutive year, it remains 300 bps above its pre-recession low of 12.4%," said Jon Southard, Managing Director of CBRE’s Econometric Advisors group. "After a strong start in 2012, job growth was disappointing and while the recent budget deal signed by Congress and the President to avoid the 'fiscal cliff' 2 might ease some near-term concerns, uncertainty surrounding continued negotiations on the federal debt ceiling and further government spending cuts will continue to pose near-term downside risks for commercial real estate. However, private sector hiring and confidence should accelerate if Washington DC is able to forge a long-term budget deal and concerns in Europe remain at bay, paving the way for stronger office-using job growth and absorption."
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