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Trends to Watch in 5 CRE Markets

By Matt Durack for AZRE

It’s that time of year again when commercial real estate firms analyze market activity based on numbers and reports from the first two quarters of the year, and predict how that will impact the rest of 2016 through next year.

Experts in their respective markets weighed in on the findings from quarter two reports in this mid-year market update of Greater Phoenix. Overall, the commercial real estate market appears to be steadily progressing in the right direction but not all markets are seeing equal levels of activity.

Retail

  • Trends: Vacancy down, rent rates up, net absorption down
  • Key Stat: Retail vacancy in the greater Phoenix metro is 60 basis points lower than one year ago
  • Outlook: Despite some setbacks, the market is still trending upward at a modest rate, and looks to continue this trend throughout the rest of the year

Industrial

  • Trends: Vacancy flat, rent rates up, net absorption down
  • Key stat: Net absorption in Q2 is down for the first time in 12 quarters
  • Outlook: The market is in recovery, but looks to improve with a strengthening housing market on the horizon

Multifamily

  • Trends: Vacancy up, rent rates up, transaction activity up
  • Key stat: Rents have risen over 8% over the course of the last 12 months
  • Outlook: More improvement in the multifamily market with vacancies tightening and rents continuing to shoot upward

Medical

  • Trends: Vacancy down, rent rates up, net absorption up
  • Key stat: Vacancy has dropped 180 basis points over the last year
  • Outlook: expectations for tenant demand to rise to its highest since a decade ago

Office

  • Trends: Vacancy up, rent rates up, net absorption up
  • Key stat: Net absorption totals have surpassed 4.7 million square feet over the last 12 months
  • Outlook: the market is expected to remain healthy as job growth continues to rise

Read more at AZRE

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