Categorized | Commercial

Commercial Real Estate Prices Increase for Third Straight Month

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For the third time in three months, commercial property values increased in the United States. During the month of July, commercial real estate prices rose five percent. The most recent rise brought commercial property prices over what they were valued at one year earlier.

While the increase is certainly good news, many analysts believe that the trend will be very short lived. The commercial real estate market is expected to slow down significantly as dismal reports about the economy’s current and future states surface.

The overall increase can mostly be attributed to increasing sales of smaller properties outside of the major cities, such as New York, Boston, Chicago, and Washington DC.

With unemployment rates still high, and vacant properties expected to increase in the coming months, there is little hope for the most recent three-month trend to continue. In fact, the overall economy in the United States has been the weakest it has been since attempts at recovery started in 2009.

Nonetheless, experts do believe that some commercial properties will be able to weather the upcoming storm, and as such, continue to see the slightest of increases. Such properties as office space, hotels, and shopping centers generally hold safer assets, and as such, will be able to maintain minimal growth.

Most investors and commercial property owners will likely have to seek out alternative routes to generate growth, as previous methods used to raise capital from commercial property investing and ownership appear to be stalling at very rapid rates. It is due to this stalling that most analysts believe the only financial growth in commercial properties will come from small rent increases.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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