Year-End Reports Show a Struggling CRE Market

ATLANTA-The local commercial real estate market began to feel the effects of the economic crisis and credit freeze after the second quarter, finishing the year with vacancies on the rise, along with slowed leasing and investment activity. Absorption also struggled within each of the sectors because of a significant amount of new deliveries in each sector, brokers agree.

Industry experts expected store sales to affect the retail sector, and found their predictions were correct by year-end. “The wrap-up to 2008 was as advertised,” Tony Cerniglia, vice president of retail services with CB Richard Ellis in Atlanta, tells GlobeSt.com. A steady barrage of bad news on the credit front and from retailers will make the market outcome no surprise, he says. Research reports on the retail sector have not yet been released.

“Atlanta, in relation to the rest of the country, has fared better than most,” Cerniglia says. “We still enjoy demographics that are increasing, including a growing population.” However, a “tremendous amount of new retail added this year has greatly weakened the market, bringing rental rates down as much as 30% in comparison to last year.” On a positive note, many new projects expected to come online after 2008 have been halted or abandoned, which should create a more healthy environment for 2009.