WASHINGTON – With a lending drought and fewer workers in many companies, commercial real estate investment, aside from cash transactions, has “essentially halted,” according to the National Association of Realtors.
“Although access to residential mortgages has improved, the opposite is true for commercial loans,” NAR Chief Economist Lawrence Yun said in a statement. “We need liquidity for commercial mortgage-backed securities not only to free the market, but to roll over existing debt. At the same time, the loss of jobs has had a significant impact on the demand for commercial space.”
The office market in the United States is expected to contract in 2009, with vacancy rates expected to hit 16.4 percent in the third quarter of the year. The national office vacancy rate was at 13.4 percent in the third quarter of 2008.
Annual rent is expected to be down 0.4 percent at the end of 2008 and an additional 3.6 percent by the end of 2009, the NAR said in its commercial-market report.
The National Association of Realtors is the nation’s largest trade association, with more than 1.3 million members in all aspects of residential and commercial real estate. Additional information is available at www.realtor.org.
