Categorized | Commercial

Commercial Real Estate Recovery Slowing Down

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Over the past year or two, the commercial real estate market in the United States has recovered quite remarkably. However, the strong recovery experienced in the last twelve to eighteen months is finally starting to show signs of slowing down.

 

During the first quarter of 2012, the commercial real estate market posted what many would consider to be mixed results. While sectors such as the technology, energy, and business startup markets demonstrated strong momentum and unprecedented growth, others struggled and even declined.

 

Leasing volume numbers were down in most markets. Construction, in general, continues to be low in most markets. Construction activity did increase, though, in the first quarter. There is now just over thirty million square feet in development in the United States.

 

The office market showed signs of struggling as well. It took in less than one million square feet during the first quarter. That number is far less than the one plus million square feet that the market sector had absorbed in the six quarters prior to this one.

 

Uncertainty in the political and financial arenas is certainly impacting the commercial real estate markets in some of the country’s biggest cities. New York and Washington DC, for example, saw leasing velocity numbers enter a state of freefall. Those results are likely due to the uncertainty in potential regulations in the financial market, as well as the current political environment.

 

On the other hand, cities like Houston are experiencing unprecedented growth due to the growth of the energy sector.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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