Study: Job, Loan Troubles Blamed for Sluggish CRE

A new National Association of Realtors (NAR) report is crediting sluggish job creation and a lack of loan availability for slow CRE recovery. The NAR study noted that, in particular, vacancy rates in the office sector are expected to fall from an estimated 16.1 percent in the third quarter of this year to 15.6 percent in the third quarter of 2013. The study has more bad news for the retail sector, predicting vacancy rates at shopping centers and malls will decline from 10.9 percent in the third quarter of this year to only 10.7 percent in the third quarter of next year.

NAR experts speculate that the difficulty small business tenants have in getting commercial real estate loans for leasing or buying property is keeping a lid on demand. And that continues to affect owners that are struggling to fill empty space at their properties. A stagnant employment picture is also holding back a full recovery—especially the sharp decrease in job creation in the second quarter, which was about half of the first quarter’s figure. It has been blamed for moderating demand in the office sector.