Commercial Real Estate Outlook This report includes details on individual markets, vacancy-rate tables and more based on the most current information the National RCA has available.

Second Quarter 2011 Highlights

Commercial real estate markets are stabilizing and job creation is boosting demand for commercial space. The economy should be adding between 1.5 and 2 million jobs annually both this year and next, with the unemployment rate falling to 8 percent by the end of next year.

With low levels of new construction in recent years, the rising demand means vacancy rates will be trending down in commercial real estate sectors. Individual markets are now stabilizing and in some cases rising.

• Vacancy rates in the office market are expected to fall a full percentage point, reaching 15.3 percent a year from now.
• Industrial vacancy rates are expected to decline nearly a percentage point to 13 percent in the second quarter of 2012.
• Retail vacancy rates are forecast to decline a half of a percentage point to 12.6 percent a year from now.
• The apartment rental market—multifamily housing—is continuing to tighten as household formation grows. Apartment vacancy rates should drop 1.1 percentage points to 4.7 percent in the second quarter of 2012—anything below 5 percent is considered a landlord's market.

Commercial Real Estate Market Survey: April 2011
The REALTORS® Commercial Real Estate Market Survey is a new quarterly project from Research that measures activity in the commercial real estate markets. The survey collects data from commercial REALTORS®, and is designed to provide members with an overview of the market performance, sales and rental transactions, current economic challenges, and future expectations.

2011 Commercial Real Estate Lending Survey
In March 2011, the National Association of REALTORS® conducted a survey of commercial real estate members focused on assessing how lending conditions impacted commercial transactions.

We invited a random sample of 56,000 REALTORS® with an interest in commercial real estate to fill out an on-line survey consisting of 12 questions. A total of 525 responses were received for an overall response rate of 0.9 percent.

Report Highlights:

• More than 70 percent of REALTORS® name lack of available financing as a major obstacle for commercial real estate this year.
• Some 87 percent of the practitioners surveyed said it has impacted clients’ decisions in 2011.
• 59 percent of respondents reported a failed transaction in the last year due to financing difficulties.

Regional Business Outlook  Monthly regional survey of business activity in the Carolinas conducted by the Federal Reserve Bank of Richmond.

Economic Indicators
NAR's analysis of housing and economic indicators provides real estate professionals with tools to interpret the market and apply that knowledge to their business. In addition to NAR’s own existing-home sales series, NAR Research monitors other indicators such as new-home sales, housing starts, producer prices, mortgage rates and more.

General Economic Concepts and Their Impact
These concepts give a broad overview of terms used to describe the economy and discussions on where the economy is headed.  Each concept stands alone but all of them provide insight into what factors are affecting the housing market.