Credit crunch not hurting commercial real estate

Demand to remain strong for office, industrial space
Published on Sep 18, 2007

Most commercial real estate markets are enjoying relatively low vacancy rates and healthy rent growth from a fundamentally sound economy, according to the latest Commercial Real Estate Outlook of the National Association of Realtors. NAR Senior Economist Lawrence Yun in a statement said, "Commercial real estate responds to economic growth and job creation, which have been fairly strong over the past two years and have created the need for additional commercial space," he said. "These fundamentals will continue to support commercial real estate markets in 2008. There has not been much overbuilding in the commercial sectors, and investors are more diverse." Yun said pricing for some commercial real estate has been at a record high, and capitalization rates have been at historic lows. "Normalization of prices may be occurring, but it isn't clear what the definition of normal might be in the current market given the repricing of risk in the capital market. In short, the differ...

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