Oct
07

CRE Momentum Grew in Q3

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Evidence continues to roll in that although the domestic economy still has its share of weaknesses, US commercial real estate is powering ahead. CBRE Group reported Monday that the third quarter saw across-the-board strengthening, with office in particular making its strongest showing in eight years.

“The real estate recovery clearly gained in strength in the third quarter as all property types saw notably improved demand trends,” says Jon Southard, managing director of CBRE’s Econometric Advisors group. “Especially important, office tenants showed greater confidence in expanding their footprint and finally appear to be shaking off the lingering effects of the recession.” Q3’s office vacancy decline of 40 basis points to 14.1% was the steepest quarterly drop since Q2 2006, while industrial availability declined 20 bps from the previous quarter, as did that of retail.

A report last week from Cassidy Turley also charted the quarterly progress that office made in Q3. The 80 US office markets tracked by the firm absorbed 20.5 million square feet during the quarter, an increase of 20% from Q2 and a 38% rise year over year. Kevin Thorpe, chief economist with Washington, DC-based Cassidy Turley, makes the linkage between stronger employment trends and tightening office supply.

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