Fundamentals Falter: Commercial Real Estate Sees Second Quarter Declines
Commercial property market fundamentals kept declining in second quarter 2009, as the recession continued its negative impact on the industry. Slower production and spending in the greater economy is negatively affecting the commercial real estate market. The institutional property market is correcting and values are falling as fundamentals continue to deteriorate.
The commercial real estate market is not expected to show any signs of recovery in the near future, according to Dividend Capital Research: “The most recent economic indicators predict positive GDP growth in third quarter 2009 then slow employment growth beginning in 2010. These two fundamentals indicate that the five real estate property type occupancy cycles should continue to decline in 2009 and start to recover some time in 2010 or 2011.”
Many businesses are either downsizing or are reluctant to make long-term leasing commitments, adversely affecting the office market. The office vacanc