By Bill Conerly, Contributor
Commercial real estate will improve marginally in 2013. New construction activity will inch upward, operating income will be a little better, and property values will level off. Later, in 2014 or 2015, operating income and prices will both rise, triggering increased construction.
The recession clobbered occupancy of office, industrial and retail space, which pulled rents down. Landlords suffered from lower revenues. In the slow recovery, new construction dwindled to nearly nothing. Current need for additional square footage was nil, and those developers who wanted to build for future demand found that lenders were hesitant to take much risk.
The current situation is that leases are dribbling in, generating small increases in occupied square footage. The current pace of construction is not only lower than in the boom, but well below historic averages. We know that given even middling economic growth, we’ll eventually need to build at a much stronger pace. However, the high vacancy rates that are a legacy of the recession will limit new construction through 2013 at least.
By Curt Arthur, statesmanjournal.com
Curt Arthor, Guest Writer
There is no question of the direct correlation between the health of the commercial real estate market and that of the residential market, including the number of foreclosures we see in the Mid-Willamette Valley each year.
Salem, like many other markets across the United States, has been stung by companies closing their operations in our market. Commercial vacancy rates have soared as we experienced closures from big box retailers such as Circuit City or Wickes Furniture, office building users like Holiday Retirement or industrial companies like Deluxe Ice Cream. The loss of these jobs weakens the housing market and negatively impacts the purchasing power of our local communities as the average household income plummets.
As household income plummets, the amount of foreclosure notices rise with residents unable to meet their expenses. Read more…
Steelhead Capital announces the publication of the current issue of the Capital Synergies podcast. This 30 minute interview offers timely insights into the trends and opportunities for commercial real estate investors in today’s market.
San Francisco, CA (PRWEB) September 29, 2012
Peter Slaugh of Steelhead Capital hosts this insightful podcast with commercial real estate expert Dan Fasulo of Real Capital Analytics. Highlights include discussion of current market trends, the uncertainty that has plagued commercial financing, and the impact of Europe investments along with discussion of the upcoming election as it relates to investor confidence in the months ahead.
Real Capital Analytics is a research and consulting firm, headquartered in New York, with offices in San Jose, California; London, England, and Singapore. RCA’s core business is tracking the sale and recapitalization of every significant commercial property, both in the United States and around the world. Read more…
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