Setting Apartments Up For a Fall - Trend Czar Article via GlobeSt.com

Tepid. Anemic. Lethargic. Slower than we’d like.

That was the commercial real estate market story for 2011, and it looks like more of the same for the New Year as well as the foreseeable future. Vacancy rates will get better, but remain uncomfortably above equilibrium. Rents won’t increase substantially, and deal making will be relatively subdued even in the top markets. From a risk perspective, this shaky forecast also will remain particularly vulnerable to bolts out of the blue—now wouldn’t it be great if the Straits of Hormuz were blocked? And can anybody feel confident about what’s going on in Europe? The tap dance continues there.

And look at what developers are doing. Have you ever seen so many commercial developers eye apartment projects? It’s understandable since fundamentals remain so weak for new office and retail product. But if that’s not a signal about the cautionary prospects in the commercial markets, especially the suburban ones, I don’t know what is.

GlobeSt.com - Setting Apartments Up For a Fall - Trend Czar Article