Most commercial real estate sectors continue to improve

Tightening vacancy rates, rising rents raise confidence

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Most commercial real estate markets can expect tightening vacancy rates and rising rents, and large investors are pouring funds into commercial sectors, according to a report from the National Association of Realtors. David Lereah, NAR's chief economist, said that most commercial market fundamentals are solid. "Commercial real estate markets move in response to changes in fundamental demand, which remains solid as a result of sustained job creation and economic growth," he said. "Except for some weakness in the retail sector, the commercial market is benefiting from lower vacancies and higher rents." Institutional investors have been very active in commercial real estate this year. "Large institutional investors such as pension funds and life insurance companies are considered to be cautious and risk adverse, so their shift of funds into commercial sectors is an affirmation of the wisdom of diversification in commercial real estate," Lereah said. Institutional investors and private ...