Nationwide, office vacancy rates are expected to fall by 1.1% to 12.1% due to job growth and the need for additional office space; industrial space is expected to fall by 1.3% to 7.1%; and rent availability is expected to decrease by 0.7% to 11.2%.
"Last year was the 11th year in a row of subpar GDP growth, but renewed corporate optimism leading to a focus on investment and a desperately needed boost in residential construction should pave the way for modest expansion this year of around 2.4 percent,” said Lawrence Yun, NAR chief economist. "Steady hiring and low local unemployment levels are finally supporting higher wages and increased spending, which in turn bodes well for sustained demand for all commercial property types.”
Meanwhile, the multifamily sector is projected to experience little change in availability as new apartments maintain vacancy rates at 6.5%. Homeownership rate will likely remain low due to ongoing supply and affordability challenges; most likely, rent will also preserve its stable growth.
"Especially in the costliest metro areas, higher home prices and mortgage rates are squeezing the budget for many renters looking to buy and inevitably forcing them to sign a lease for at least another year,” Yun said.
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Commercial real estate is expected to experience steady growth in 2017, according to new data from the National Association of Realtors.