Amid an improving commercial real estate market, the ""National Association of Realtors (NAR)"":http://www.realtor.org/ predicts declining vacancy rates in all sectors of commercial real estate in the coming year.
[IMAGE]""Job creation is the key to increasing demand in the commercial real estate sectors,"" said NAR's chief economist, Lawrence Yun.
According to Yun, the single factor most hindering job creation is ""uncertainty over regulations and associated costs."" However, ""[w]ith the elections behind us and Washington apparently resolved to prevent a fiscal cliff, it's hoped that ambiguity over regulatory issues will clear relatively soon so employers can understand the rules of the game and the layout of the field.""
Vacancy rates are expected to decline in all four categories of commercial real estate by the end of 2013. While the smallest vacancy decline is expected in the multifamily [COLUMN_BREAK]
sector, NAR states there is ""a full recovery already in the multifamily market.""
Availability is tightest among multifamily properties, and multifamily rents are outpacing other commercial rents and exceeding inflation, according to NAR.
The association expects multifamily vacancies to decline from 4 percent in the fourth quarter of this year to 3.9 percent in the fourth quarter of 2013.
The greatest vacancy decline is expected among office properties. Office vacancies should fall about one percentage point over the year, dropping from 16.7 percent to 15.7 percent.
NAR expects the net absorption of office properties to rise from 21.7 million square feet at the end of this year to 49 million square feet by the end of next year.
Industrial property vacancies will fall by 0.6 percentage points, according to NAR's prediction. After ending the year with a vacancy rate of 10.1 percent, the sector should end 2013 with a rate of 9.5 percent.
NAR expects to end next year with a net absorption of industrial space totaling about 89.6 million square feet.
Retail properties will experience a vacancy rate decline of about 0.2 points from the fourth quarter of 2012 to the fourth quarter of 2013. After ending this year with a rate of about 10.8 percent, the sector should end next year at about 10.6 percent, according to NAR.
Net absorption is anticipated to rise from 9.1 million square feet this year to 19.8 million square feet by the fourth quarter of next year.