The commercial real estate market is likely to stay weak into 2010, and any recovery is unlikely until the second half of next year at the earliest, the National Association of Realtors said Wednesday.
The group said its Commercial Leading Indicator for Brokerage Activity fell to a 15-year low in the second quarter as continued high unemployment, falling industrial production and broader economic difficulties weighed on the commercial real estate market.
"Any meaningful recovery is not likely to occur before the second half of next year," the Realtors' chief economist, Lawrence Yun, said in a press release.
The group forecast that vacancy rates in the office, industrial and retail sectors would keep climbing in 2010 and that rents would fall. Any recovery in the commercial market will hinge on when the economy begins to turn around in earnest, Yun said.
"The office sector requires job growth to fuel the demand for additional space, the industrial sector needs a rise in production, and the retail sector is tied to consumer spending," he said.
The trade group cited a separate survey by the Society of Industrial and Office Realtors. This group's Commercial Real Estate Index declined for a 10th consecutive quarter, with respondents seeing sizable rental discounts and sale prices lower than replacement costs.