Vacancy rates in the office sector should decline from a projected 15.7 percent in the second quarter to 15.6 percent in the second quarter of 2014.
The markets with the lowest office vacancy rates presently (in the second quarter) are Washington, D.C., with a vacancy rate of 9.4 percent; New York City, at 9.9 percent; Little Rock, Ark., 12.0 percent; and Birmingham, Ala., 12.3 percent.
Office rents are likely to increase 2.6 percent this year and 2.8 percent in 2014. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, will probably total 31.7 million square feet this year and 42.0 million in 2014.
Industrial vacancy rates are expected to slide from 9.4 percent in the second quarter of this year to 8.9 percent in the second quarter of 2014.
The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 3.9 percent; Los Angeles, 4.1 percent; Miami, 5.8 percent; and Seattle at 6.3 percent.
Annual industrial rents are seen to rise 2.4 percent this year and 2.6 percent in 2014. Net absorption of industrial space nationally is forecast to total 107.1 million square feet in 2013 and 100.3 million next year.
Retail vacancy rates are estimated to ease from 10.5 percent in the second quarter of this year to 10.2 percent in the second quarter of 2014.
Presently, markets with the lowest retail vacancy rates include San Francisco, 3.6 percent; Fairfield County, Conn., at 4.1 percent; and Long Island, N.Y., and Orange County, Calif., each at 5.3 percent.
Average retail rents are projected to rise 1.4 percent in 2013 and 2.2 percent next year. Net absorption of retail space is anticipated to be 12.5 million square feet in 2013 and 17.4 million next year.
The apartment rental market -- multifamily housing -- should see vacancy rates edge up from 3.9 percent in the second quarter to 4.1 percent in the second quarter of 2014; vacancy rates at less than 5 percent are described as a landlord's market, with demand justifying higher rents.
Areas with the lowest multifamily vacancy rates currently are New Haven, Conn., at 2.0 percent; New York City, 2.2 percent; and Minneapolis and San Diego, each at 2.3 percent.
Average apartment rents are likely to increase 4.6 percent this year and another 4.6 percent in 2014. Multifamily net absorption is expected to total 276,300 units in 2013 and 243,800 next year.
The Commercial Real Estate Outlook is published by the NAR Research Division. NAR's Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.
The NAR commercial community includes commercial members; commercial real estate boards; commercial committees, subcommittees and forums; and the NAR commercial affiliate organizations -- CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.
Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business.
The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries. For additional commentary and consumer information, visit www.houselogic.com and http://retradio.com.
(1)Dollar volume is from Real Capital Analytics.
(2)Additional analyses will be posted under Economists' Outlook in the Research blog section of Realtor.org in coming days at: http://economistsoutlook.blogs.realtor.org/.
(3)Beginning in the third quarter of 2011, NAR commercial forecasts have been generated based on historical data provided by REIS, Inc., and do not correspond with prior historical information from previous forecasts. This source permits coverage of more metro areas than were previously covered.
The next commercial real estate forecast and quarterly market report will be released on August 26 at 10:00 a.m. EDT.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the "News, Blogs and Videos" tab on the website. Other commercial information and reports are posted in the Commercial Research area of the "Research and Statistics" tab.
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