Bullish Market in Commercial Real Estate to Last Two Years

April 06, 2012 / Elizabeth Buckley, Commercial Property Analyst

A considerable bustle of leasing and selling activity will occur in the commercial real estate market between 2012 and 2014. More of everything is going to take place. There will be more investing, more securities that are backed by mortgages and the rents will be more. Vacancy rates will decrease and those rents increase.

Bullish Market in Commercial Real Estate to Last Two Years

The total volume is predicted to increase to fifty percent. Industrial and retail space should see fewer vacancies. However, apartment vacancies are supposed to remain the same. Investment returns for institutional investors are predicted to be anywhere from eight to eleven percent.

One example of the bullish real estate market is Russell Sigler Company, a distributor for Carrier air conditioners. They signed a lease for 105,000 square feet of industrial property space in Riverside. The space was empty for six months according to the owner. During the time it was vacant the owner did some renovating to make the space more attractive.

Twice as many mortgage-backed securities are predicted. These predictions are for the entire country. There are no separate numbers available for states or even for specific parts of the country. While California may be adding jobs and leasing more commercial real estate, Iowa may be far behind in the expected levels of activity.

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