Future bright for industrial, multifamily real estate

Oil prices, weak labor market impact office, retail sectors

Healthy demand for space is driving commercial real estate markets with solid fundamentals and strong investment activity, according to the latest Commercial Real Estate Outlook of the National Association of Realtors. David Lereah, NAR's chief economist, said fundamentals are improving with tightening vacancies. "Rent growth in commercial space is gaining traction, although there is some softness in part of the retail sector," he said. "Commercial real estate remains a bright spot in the economy, but there are concerns over energy costs, rising interest rates and slower-than-expected job growth, which could dampen future demand." Lereah said investment considerations remain positive. "With tightening vacancies and a slowdown in speculative construction, the office market will offer respectable returns for investors," he said. "Strong international trade is supporting warehouse and distribution space, especially near port facilities. In addition, demand for rental apartments and hotel ...