by Dan Rafter
The most experienced, and brightest, real estate industry minds are saying good things about commercial real estate today.
And for that, commercial brokers must be thankful. After all, the commercial real estate industry has been a challenging one for years now, with even the most experienced real estate brokers having to work harder than ever to earn solid livings.
This probably won’t change overnight. But the latest Urban Land Institute/E&Y Real Estate Consensus Forecast does provide hope to those brokers waiting for a stronger turnaround in the industry. The forecast says that commercial property transaction volume will soar to $430 billion by 2016. And for those keeping track, that volume is higher than in the record-setting year of 2006.
The survey, which was conducted from mid-February through mid-March, mined the opinions of 39 real estate economists and analysts. It also contained plenty of good news. The experts said that they expect retail rental rates to rise in 2014 and that hotel occupancy rates should jump.
Vacancy rates this year for office, retail and industrial properties are expected to fall, too, according to the survey, though this drop will be a modest one.
The experts predicted that industrial vacancy rates will fall from 11.3 percent in 2013 to 10.7 percent in 2014, 10.3 percent in 2015 and 10.1 percent when 2016 comes to an end.
Office vacancy rates are predicted to fall steadily, too, dropping from 14.9 percent in 2013 to 14.3 percent in 2014, 13.7 percent in 2015 and 13.1 percent in 2016. Retail vacancy rates were forecast to fall to 11.5 percent in 2014, 11.1 percent in 2015 and 10.8 percent in 2016.