Job Losses Lead to Rising Vacancies in U.S. Property Sectors – National Real Estate Investor – Poonkulali Thangavelu – 8 August 08
Suzanne Mulvee, a senior real estate economist with Boston-based Property and Portfolio Research, believes the loss of 51,000 non-farm payroll jobs in July and 463,000 since the start of the year doesn’t bode well for U.S. commercial real estate…The national retail vacancy rate, which started climbing earlier than in other property sectors, is currently pegged at 11.8%. PPR’s forecast is for this figure to rise to 14% by late 2009. That’s up from a vacancy rate of less than 10% in 2006…There have been more than 5,000 store closings, or announced closings, year-to-date in the sector, PPR reports. This is the highest number of closings since 2004. In addition, the retail sector is feeling the impact of consumer distress…
In the office sector, the vacancy rate nationally is 15.6% at mid-year, up from a bottom of 14.7% in the third quarter of 2007. PPR expects this figure will peak at close to 17% by late 2009. This forecast is based on 54 of the largest U.S. metros tracked by the firm.
And PPR sees vacancy for industrial properties topping out at more than 10% by the end of the year, up from the current 9.4%.
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