Commercial Property Performance to Improve in 2012

December 02, 2011 / Elizabeth Buckley, Commercial Property Analyst

There is good news on the horizon for commercial rental properties. Commercial real estate is predicted to gradually improve along with modest economic growth. Members of the National Association of Realtors (NAR) see 2012 as a year for growth.

Commercial Property Performance to Improve in 2012

It is, however, still a tenant’s market at this time. Multifamily structures have a strong market demand. In the third quarter of 2011, vacancies are predicted to fall from five percent to 4.3 percent. This vacancy rate is expected to drop by the end of December. This will improve the situation for the building owners, as rent increases are likely to follow.

Another prediction is the likelihood of rental increases where the market in multifamily buildings is strong. Research studies showed a 98 percent increase in the number of loans granted for commercial real estate from July 2011 to September 2011. This 98 percent rise is measured against the same months, July to September, in 2010.

Of course, multifamily rental buildings are not the only category of commercial real estate properties. Other categories include retail (malls, stores) office buildings (medical complexes) and industrial property (warehouses, distribution centers, parking garages). All are expected to improve depending on economic growth in 2012.

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