Commercial Real Estate Status

Commercial projects typically require significant financial resources. Banks have been reluctant to lend for commercial projects. When will this change-----when the economy changes and confidence is restored. Multifamily activity has been strong fueled by low housing starts, lack of housing formations and foreclosures.

Source: Commercial Connections, Q2, 2012

Multifamily                                                  2011                    2012                   2013

Vacancy                                                     5.2%                    4.4%                   4.3%

Completions                                            37,678                  82,492                156,643

Rent                                                         +2.2%                  +4.0%                  +4.1%

The number of completed units in 2013 is a result of 2012 starts reflecting strong demand. Until the economy recovers, renting will be the ONLY choice for many families/individuals because of bad credit. If you have good credit, buying a home/TH/condo today will fix your monthly cost and it will be less expensive than renting. It is time to buy with interest rates remaining at a historic low!

Office buildings – vacancies are down slightly and rents are up 2.0%

Industrial buildings ---- vacancies are down and completions are up considerably. Rents are moving into a positive trend up

Retail buildings ---vacancies are decreasing and completions are expected to be significant in 2013 and rents will begin to increase as well.

The commercial sector of real estate development is showing signs of life! As you know, the commercial sector follows demographics and roof tops. This is good news.

Can we sustain the momentum?