Commercial real estate poised for slower growth in ’07

Energy prices, borrowing costs to take a toll, NAR says

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The Commercial Leading Indicator for Brokerage Activity, a leading indicator for the commercial real estate market, shows an improvement in commercial sectors will continue into 2007, the National Association of Realtors reported today. During the second quarter, the Commercial Leading Indicator for Brokerage Activity was at an index of 119.4, up 0.4 percent from a reading of 118.9 in the first quarter. The index is 2.5 percent above the second quarter of 2005 when it stood at 116.5. The second quarter index was the fifth straight quarter of growth. NAR's commercial leading indicator is a tool to assess market behavior in the major commercial real estate sectors. The index incorporates 13 variables that reflect future commercial real estate activity, weighted appropriately to produce a single indicator of future market performance, and is designed to provide early signals of turning points between expansions and slowdowns in commercial real estate. David Lereah, NAR's chief economis...