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The fundamentals in commercial real estate remain healthy with only slight increases in vacancy rates expected for the office and industrial sectors during 2008. Recent credit restrictions have slowed overall investment activity. While vacancy rates remain relatively low for all sectors, they are expected to rise slightly in the office and industrial markets during the coming year because much of the space being absorbed is in high-quality buildings or are built-to-suit. Vacancy rates in the retail and multi-family sectors are projected to tighten in 2008 with rents rising in all sectors. Commercial real estate investment is at record-high levels, but tighter credit conditions will limit deals from moving forward because capitalization rates are low, it is likely that commercial property prices will ease. The era of rapid commercial property price increases has ended. Even with the low cap rates, the investment market is brisk. By the end of October 2007, a record $325 billion worth of commercial real estate had traded hands nationwide, with over half involving office properties prices will ease. The era of rapid commercial property price increases has ended. Even with the low cap rates, the investment market is brisk. By the end of October 2007, a record $325 billion worth of commercial real estate had traded hands nationwide, with over half involving office properties.

For more information contact Art Farmanali, SIOR: 702-363-7600