Commercial real estate market nears recovery

Vacancies drop, rents rise in latest survey

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A rebound in economic growth and job gains over the next year, coupled with an expected retreat in oil prices and strong business spending in the second half of this year, is setting the stage for improvements in commercial real estate, according to the National Association of Realtors Commercial Real Estate Quarterly. David Lereah, NAR's chief economist, said there already is a strong flow of capital into commercial real estate. "This optimism by investors says more about the future of the commercial real estate sector than anything else," he said. "The investment level shows they understand the value of portfolio diversification and the fundamental demand for commercial real estate that occur in a growing economy." More than $99 billion in commercial sales took place in 57 tracked metropolitan areas during the first eight months of 2004, up from $54.6 billion during the same period in 2003. This includes a 66 percent increase in the purchase of office buildings and a 40 percent ris...