Commercial Real Estate Index
85 percent of SIORs pointing to vacancies
which are the same or lower than a year ago.
Concessions remain the norm for 68 percent of
respondents, a trend which has been constantly
declining, slowly moving in landlords’ favor.
Subleasing availability also notched a slight
improvement, with only one in five SIORs
reporting ample sublease space. With fundamentals notching gains, rents remained even, as
61 percent of practitioners reported rents in line
with or slightly above long-term averages.
Construction of new commercial space
picked up during the fourth quarter, with almost
10 percent of respondents reporting growing
supply. Development conditions continued to
strengthen—even though they remain in buyers’ favor—acquisition prices were lower than
construction costs in 72 percent of the markets
(compared with 79 percent during the third
quarter). The national economy’s improvement,
led to a rise in local economic conditions—66
percent of SIORs reported negative impacts at
the local level from national trends, down from
81 percent in the second quarter of 2012.
Looking at the broader landscape, commercial markets continued strengthening during
2012. Fundamentals maintained momentum,
and SIOR members expected conditions to
remain positive going into 2013—almost two
thirds of respondents anticipate better markets
in the next three months.