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Brokerage Indicator Points to Steady Growth

WASHINGTON, DC-The DC area continues to lead in office. Overall, the indicator points to a net absorption of industrial and office space for the rest of 2006.

By Erika Morphy | Updated on May 24, 2006

WASHINGTON, DC-The latest release of the Commercial Leading Indicator for Brokerage Activity points to a net absorption of industrial and office space for the rest of 2006. Published by the National Association of Realtors, the index was at 118.9 during the first quarter, rising .8% from an upwardly revised reading of 118.0 in the fourth quarter.

The index is 2.7% higher than the first quarter of 2005 when it stood at 115.7. The first quarter index marked four straight quarters of growth, with improvement seen in 10 of the last 11 quarters. David Lereah, NAR’s chief economist, tells GlobeSt.com that such modest increases are good for the commercial sector. “You don’t want overbuilding as we have had in the past.”

Net absorption in the office and industrial sectors in the fourth quarter is projected to be 135 to 155 million sf. About $284.5 billion in additional commercial construction is expected in the fourth quarter, an increase of $17.4 billion above the $267.1 billion recorded in the first quarter.

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