The US commercial real estate market ended last year strongly, with continued recovery noted in the fourth quarter according to CBRE.
The office vacancy rate declined by a total of 30 basis points to hit 14.8 per cent in Q4. This was the most distinct fall over six quarters. Over the entire year the vacancy rate declined by 60 basis points, which was the best performance seen since 2006.
National industrial availability decreased in the same quarter by 40 basis points to 11.3 per cent. The rate dropped 140 basis points over the year and is now 330 basis points lower than its recessionary peak.
Retail availability dropped by 30 basis points to 12 per cent and was down by 70 points over the year.
The declining vacancy rate in the office market continues to be quite broad-based. Several markets saw declines over the course of the year. CBRE tracked a total of 63 U.S. office markets, and 44 of them saw rates fall over the course of the year. Rates rose in 15 of them, and they remained unchanged in four.
CBRE is forecasting that the U.S. office market vacancy rate will continue its downward trend in 2014, and reach 14.3 per cent by the end of the year.
Retail availability rates decreased to 12 per cent in the last quarter of 2013. This significant drop matches the momentum seen in the first half of 2013. It reflects a re-acceleration following a flat trend in Q3 .Retailers were very interested in absorbing space in the busy Holiday shopping season.
CBRE forecasts the availability rate will decline to 10.6 per cent this year.
With an availability rate currently sitting at 11.3 per cent, the industrial market is in the midst of a solid recovery that has lasted for 14 consecutive quarters. The majority of the markets have improved over the last three months of the year, with 48 of 61 reporting declines in availability. Only eight markets reported increases, and five remained unchanged from the previous quarter.
