Commercial real estate weathering credit crunch

NAR economist expects demand to reduce vacancies in 2008

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Commercial real estate sectors continue to perform well with sound market fundamentals, according to a commercial market update and forecast released by the National Association of Realtors. Lawrence Yun, NAR's chief economist, expects vacancy rates to trend down in most commercial markets next year. "Vacancy rates should be gradually declining in the overall office, industrial, retail and multifamily sectors during 2008, reflecting the underlying demand for space in a growing economy," he said in a statement. "Areas with strong job growth will see the healthiest commercial markets." Yun said recent disruptions in the mortgage market have not had a similar impact on the commercial sectors. "Despite some initial concerns, there have been no serious capital problems for institutional-grade properties, and most of the commercial market is performing well even though some private transactions have been cancelled or postponed," he said. "As we move beyond confidence and pricing ...