REIS Q3 National Office Industrial Retail Multifamily Summary
REIS has recently released its Preliminary Trends Announcement for Third Quarter 2014 Findings in the National Office, Apartment, and Retail Sectors. The findings are consistent with what was presented at the 2014 CBC Global conference three weeks ago. Listed below is a brief summary of the report.
Tailwinds – According to REIS, the end of 2014 remains optimistic in three of the last four quarters. GDP has grown between 3.5% and 4.5% overcoming the slow start.
Average monthly job gains are 220,000 per month, which is well ahead of last year’s pace.
Office – Vacancy remains the same at 16.8%. Asking and effective rents have grown over the past year at 2.5% +/-. If employment continues to decrease, a downward pressure on vacancy will be seen.
Apartment Sector – Vacancy increased 10 basis points to 4.2%. This is due to new units coming on line to meet demand. REIS does not expect the vacancy to rise above 5% before 2018. Rent increases have averaged 3.2% YOY. Demand will continue to absorb units and therefore the rate of vacancy increase will be slow.
Retail – Vacancy has remained unchanged at 10.3% for neighborhood and community centers.
The same holds for regional malls which holds at 7.9%. Reflecting the supply situation asking and effective rents have increased an average of 1.8%.
Industrial – Vacancy on Warehouse and Distribution through Q2 is down 2 basis points to 11.2%. Demand continues to improve, driven by supply chain and order fulfillment.
By Fred Schmidt, President & COO, Coldwell Banker Commercial Affiliates