Commercial Real Estate Outlook Bleak
The National Association of Realtors says more commercial properties could end up in foreclosure as the market and commercial lending have slowed nearly to a standstill.
According to the association's Commercial Real Estate Outlook, commercial lending has essentially halted and job losses are reducing the demand for office, industrial, retail and multi-family properties.
Although default rates on commercial properties are very low, they could increase without some kind of stimulus "that addresses liquidity for commercial mortgages," the association said.
The association expects office rents to dip by nearly 0.5 percent in 2009. It also expects vacancy in industrial properties to rise to about 12 percent even as rents decrease by 0.8 percent. The retail vacancy rate will increase to nearly 13 percent while the multifamily sector remains flat, the association said.
In a separate report based on a client survey, commercial real estate broker Colliers International said the commercial market may not pick up until the third quarter of 2009.
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