by Shane Henson — October 30, 2013—The U.S. commercial real estate market continued a slow but steady recovery in the third quarter of 2013 (Q3 2013), according to the latest analysis from global commercial real estate services and investment firm CBRE Group Inc.
The office vacancy rate dropped 10 basis points (bps) during the quarter to 15.1 percent. The quarterly change was slightly slower than last quarter’s 20 bps decline, but in absolute terms, vacancy was 50 bps below the Q3 2012 rate of 15.6 percent. However, the continued progress reflects the office market’s ability to withstand the effects of the federal government’s spending reductions—known as the “sequester”—while dealing with an already sluggish pace of economic growth.
Meanwhile, in Q3 2013, national industrial availability decreased by 30 bps from the previous quarter, to 11.7 percent. The rate is 130 bps below its year-ago level, and 290 bps below its recessionary peak, says CBRE. The retail availability rate declined 10 bps to 12.2 percent and was down 70 bps compared to the rate one year ago. Also, demand for the nation’s apartment buildings held steady with vacancy of 4.6 percent in Q3 2013.
“Office market occupancy inched ahead in the third quarter. The slow progress remains consistent with a growing but fragile economy,” said Jon Southard, managing director of CBRE’s econometric advisors group. “However, industrial markets continue to out-perform due to improved foreign trade and resilient consumer and business spending at home.”
