Commercial real estate is one of the better indicators of economic health in a given area, especially since the real estate crisis following the recession. Luckily, several commercial real estate markets have improved in locales around the nation, while reports last month showed increases in new commercial real estate loan disbursement volumes.
In July, the Mortgage Bankers Association reported that commercial loan originations grew about 25 percent year-over-year in the second quarter of 2012. Further, the data found a 56 percent increase in such volumes for the retail sector – 15 percent for office space and 22 percent in the hotel industry.
Three separate reports last week revealed that several states and cities are experiencing very strong growth in commercial real estate purchases. First, Austin, Texas-based CBS affiliate KXAN reported that office space vacancies have dropped off significantly in the last two years.
Currently, the source explains, the market is at 85 percent capacity, while the increase accounted for about 1 million square feet of new occupancies in office spaces since 2010.
“Last year we had a total of 17 sales with consideration of $291 million,” Helen Jobes, of a local commercial investment firm, told the news provider. “So far this year, we’ve had 14 sales with consideration of $403 million.”
While this is excellent news for the local economy, Jobes noted to KXAN that this will begin the incline of rent costs and other real estate-related expenditures. While the rates are still low, though, the time is right for small business owners to purchase properties and lock in lower rates, if possible.
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Providence Business News reported last week that the state of Rhode Island has seen several signs of commercial real estate improvement this year, especially compared to last year. According to the source, Capstone Properties released its mid-year survey that showed vacancies of office spaces dropped almost a full percentage point in the last six months, down to just over 9 percent.
The news provider explained that the biggest improvements have been in the food industry sector, though the retail market has remained stagnant at 6.1 percent vacancy across the Ocean State. Finally, the industrial and manufacturing commercial real estate markets have been steadily improving, according to the report.
Finally, TerraCRG released its latest report on the state of commercial real estate in Brooklyn, New York. The borough experienced solid growth in the first six months of 2012 in almost all asset classes and regions, according to the realty firm. Overall, the report counted 563 transactions worth more than $1.2 billion in the first half of the year, though this includes multi-family, mixed use, retail, development and industrial real estate.
Development transactions pulled in nearly $200 million in new transaction dollars from 91 deals, while industrial accounted for more than $88 million and retail real estate saw more than $145 million in new transactions. Multi-family asset classes took home the prize, though, with more than $635 million in new transactions.
All of these figures will likely reverberate through next year, when the costs of commercial real estate begin to increase from the historic lows of the last three years. Now is an excellent time to seek out the financing you need and make purchases in new locations.