The recovery in US commercial real estate markets continued in the first quarter of 2012, but at a slower rate than in the previous three-month period. This is the finding of the Jones Lang LaSalle First-Quarter 2012 Office Outlook, which revealed just under 1 million sq ft of office space was absorbed in the three months from January to March, significantly lower than the average of 8.6 million sq ft recorded in the previous six quarters.
Senior vice-president of research at the firm John Sikaitis commented: "While the recovery slowed during the quarter, it remains intact. Looking ahead to the remainder of 2012, markets will continue to recover, and in some cases contract, at different rates of speed. Overall rents across most markets will grow, but at slow and measured paces unless some significant cushion of technology or energy pockets exist." The organisation noted expansion and start-up activity among technology companies was prevalent across markets with strong growth prospects, while regions that rely on energy businesses recorded some of the biggest leases over the last three months and saw sales of commercial real estate accelerate more quickly than elsewhere.
Houston was named as one market that may present commercial real estate investment opportunities due to the strength of the energy sector in the area, which is being driven forward by rising oil prices and expansion within the natural gas sector. Denver is another location that is benefiting from a growing natural gas industry, the report added. Los Angeles, meanwhile, saw the take-up of commercial space improve in the first quarter of 2012, largely as a result of demand from entertainment and gaming organisations.
In February, CB Richard Ellis published a list of predictions for the US commercial property market in 2012, which included improving fundamentals for the suburban office sector and rents for retail units experiencing a moderate increase by the end of the year. In addition, the firm predicted there will be greater demand for large warehouses, as occupiers take advantage of low rents to secure better premises for their business.
- Thursday 05 April 2012