Future bright for commercial real estate

Net absorption of office space poised to climb 63% this year

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

The improving economy and rising job market mean the fundamental demand for commercial real estate space will rise over the course of the year and create an even stronger demand that will see rising rents in 2005, according to the National Association of Realtors Commercial Real Estate Quarterly. David Lereah, NAR's chief economist, said 1.2 million payroll jobs were added to the economy during the first five months of this year. "We could see an average of 210,000 to 240,000 new jobs per month over the next two years, which will create additional demand for commercial real estate," he said. "A rise in net absorption of commercial space is expected over the course of the year. Rents are firming and all sectors can expect higher rents in 2005 as vacancy rates decline," Lereah said. The NAR analysis covers a wide range of statistics and market rankings for the major commercial sectors in 54 markets tracked, including the office, retail, warehouse and multifamily markets, as well as marke...