Commercial properties poised for steady returns

| Oct 5, 2017 | commercial real estate

Rising rents and low vacancy levels may position the commercial real estate sector to provide stable returns to investors in Florida and around the country according to NAI Global. The real estate brokerage firm mentioned that demand was strong in the second quarter and could remain strong for the rest of 2017. The net absorption rate nationally in the industrial sector rose to 71.8 million square feet while rents rose 1.6 percent in the second quarter.

Industrial vacancy rates were near 20-year lows at 5.1 percent while the office sector had a vacancy rate of 9.6 percent. In the office sector, rents were down slightly on a national level. However, this was because of decreases in rental values in Chicago and New York. The other 19 major markets used to calculate data all saw their average rental rates increase.

Like with the industrial and office sectors, the retail sector saw steady absorption rates. It also saw vacancies remain steady in the second quarter while average rent increased by 1.6 percent. This marks the fifth straight year that rental rates have increased for retail properties despite dire predictions about the health of brick-and-mortar retailers. Overall, construction rates are seen to be indicative of a sector that may experience continued growth.

Buying or otherwise investing in office buildings or other commercial properties may help an individual earn a return on capital. It may be worthwhile to meet with an attorney or a financial adviser prior to making such a decision. Having professional advice may make it easier to determine if a given property fits an individual’s investment goals.