Although still positive, a slowdown in job creation and ongoing tight loan availability has tempered commercial growth in some areas, according to the National Association of REALTORS®' quarterly commercial real estate forecast. 

The current commercial real estate cycle has been driven by shifts in demand without an oversupply of new construction. 

“The difficulty small businesses have in getting commercial real estate loans for leasing or purchase is keeping a lid on demand,” NAR Chief Economist Lawrence Yun said. “Multifamily is the only commercial sector with a notable growth in new space, with some lending provided through government loans.”

Vacancy rates are declining and rents are rising in all sectors, but significant changes are unlikely before the end of the year. Many corporate decisions on spending and hiring are on hold, pending the upcoming elections and congressional action on financial and healthcare issues.

“Overall companies hold plentiful cash reserves, but they are hesitant to hire without clarity over how these outstanding issues will impact the bottom line,” Yun said.

Data and projections for the four major commercial sectors covered in NAR’s latest Commercial Real Estate Outlook include:

Office

• Vacancy rates are expected to fall from 16.1 percent in the third quarter to 15.6 percent in the third quarter of 2013.
• The lowest vacancy rate is presently in Washington, D.C., at 9.4 percent.
• Rent is projected to increase 2 percent this year and 2.6 percent in 2013. 
• Net absorption should be 24.1 million square feet in 2012 and 47.8 million next year.

Industrial

• Vacancy rates should decline from 10.7 percent in the third quarter of this year to 10.5 percent in the third quarter of 2013.
• The lowest vacancy rate is presently in Orange County, Calif., at 4.6 percent.
• Rent is likely to rise 1.7 percent in 2012 and 2.4 percent in 2013. 
• Net absorption is at 59.8 million square feet in 2012 and 67.2 million in 2013.

Retail

• Vacancy rates are projected to decline from 10.9 percent in the third quarter to 10.7 percent in the third quarter of 2013.
• The lowest vacancy rate is presently in San Francisco, at 3.8 percent.
• Rent is forecast to rise 0.8 percent this year and 1.3 percent in 2013. 
• Net absorption should be 10.3 million square feet in 2012 and 20.1 million in 2013.

Multifamily

• Vacancy rates should drop from 4.3 percent in the third quarter of 2012 to 4.2 percent in the third quarter of 2013.
• The lowest vacancy rate is presently in Portland, Ore., at 2 percent.
• Rent is likely to increase 4.1 percent in 2012 and another 4.4 percent next year. 
• Net absorption should be 219,300 units this year and 236,600 in 2013.

Source: National Association of REALTORS®