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GlobeSt.com EXCLUSIVE: Market Recovery Takes Hold

NEW YORK CITY-By year-end 2005, average rents had increased in nearly all property sectors in the US, according to NAI Global's 2006 Global Market Report. And vacancies had fallen in every property category on average and in most key markets.

By Barbara Jarvie | Updated on January 16, 2006

NEW YORK CITY-”There is a growing sense that the recovery has firmly taken hold and that the outlook is for continued strengthening in rental rates and continued declines in vacancies,” says NAI Global president and chief operating officer Jeffrey Finn. His assertion was based on findings from the firm’s soon-to-be released 2006 Global Market Report. Linneman Associates worked with NAI Global again to prepare the outlook.

Commercial property markets throughout the world continued to expand and strengthen in 2005. By year-end 2005, average rents had increased in nearly all property sectors in the US, and vacancy rates were trending down in almost every property type.

The retail and residential sectors will continue at full speed ahead, the report predicts with “ever higher quality homes” being built to satisfy growing demand and more retail development to meet consumer demands. These sectors will be “extremely robust” over the next three years, as homes destroyed by Katrina and Rita are rebuilt. Despite 13 consecutive increases in the Fed’s overnight rate over the last 18 months, there is little sign of any slowdown in activity reported by NAI Global Members. This performance is fully expected to extend through 2006, with rents continuing to trend upwards and vacancies to slowly tighten.

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