CBRE Says CRE Continues Recovery in Q4

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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US Office Vacancy Rate 16% in Q1 2012

CBRE Econometric Advisors (CBRE-EA) released their latest analysis of the real estate sectors in America for Q1 2012, showing that the office vacancy rate remained at 16% after Q4 2011 and industrial availability dropped to 13.4%. "The most important economic news in Q1 2012 was the pick-up in hiring, but so far we have only seen strong improvement in the multi-family sector," said Jon Southard, Managing Director, CBRE-EA. "For property types with longer leases, the employment gains served mostly to fill in "shadow vacancy" -- space that was previously leased but not used. The delay between stronger employment and a pick-up in leasing demand is typical for the early stages of recovery in the office, industrial, and retail sectors."

"The job market will need to approach its pre-recession form before more rapid improvement in the office market can take hold," Mr. Southard said. "We continue to anticipate more robust hiring during the second half of 2012, which will move us closer to that goal."

This past week CBRE Group Inc. also held its quarterly press event in Houston, noting that there may not enough available office space in the city to go around according to a Houston Business Journal article. Jon Lee, a first vice president with brokerage services at CBRE, noted that, in the Houston-specific submarket, the climate has shifted in such a way that where he previously had several options to choose from, he's now finding it difficult to find space at all.

"There are bidding wars that are occurring," said Lee, referring to west Houston. "We're seeing bidding wars on Class B space. It doesn't take a rocket scientist to see that in a couple of years, we're going to have a problem."

For more news and information visit Blumberg Capital Partners.

Offce Vacancies Decline in Q2

According to CBRE Econometric Advisors (CBRE-EA) the U.S. office vacancy rates dropped to 16.2% in the second quarter of this year. This drop, down 20 basis points from the previous quarter, marks the fourth consecutive quarterly decline reports CBRE.

"The property sectors outside of retail are benefiting from the modest pace of economic recovery and muted construction activity," noted Asieh Mansour, head of Americas Research for CBRE. "The retail sector continues to feel the effects of a cautious consumer, hit by rising food and energy prices, as well as elevated rates of unemployment. Mounting competition from online shopping has also hurt demand for bricks-and-mortar retail."

For more news and information visit Blumberg Capital Partners.