The nation’s retail markets also appear to have stabilized. While some markets still struggle to fill big boxes vacated by national chains, others have seen new entries and local retailers upgrading to better locations. The national average vacancy rate for downtown/CBD retail space stood at 8.2% in 2010, down from 8.9% in 2009, while rents slipped from $39.90 in 2009 to $39.79 in 2010.

What’s more, industrial markets also appear to be on the mend. While demand for weak warehousing space continues to be weighed down by weak consumer demand, the market has benefited from a diminishing pipeline of new construction. Vacancy rates for bulk warehouse space stood at 10.7% in 2010, down from 10.9% in 2009. Rental rates slipped from $4.60 in 2009 to $4.55 in 2010

“Although 2010 was another very challenging year for the industry, we began to see clear signs that the global economy and commercial real estate markets had stabilized and were beginning to improve with a noticeable pickup in transaction volume around the world,” Jeffrey M. Finn, president and CEO of NAI Global, said in the report. “Companies around the globe are taking advantage of the current market, extending or renegotiating leases, securing investment properties, disposing of underperforming assets and finalizing plans for growth in the next 24 months. We expect a much more active market for buyers, sellers and occupiers as conditions continue to improve.”

The investment market also showed signs of life in 2010 as credit markets thawed. The massive wave of foreclosures that was predicted heading into 2010 never materialized as financial institutions opted to extend or re-work troubled loans. However, the sidelines are growing crowded with REITs, private equity and institutional investors who have amassed a tremendous amount of capital and are actively looking for deals, said Finn. Commercial real estate investment should also get a boost from new investors drawn to real estate in pursuit of yields and further enticed by record low interest rates.

Markets across the US are showing signs of recovery, as are parts of Asia, Europe and Latin America. But financial collapses in countries like Greece, Iceland and Ireland are endemic to the rocky global recovery. For every Brazil and China, countries that are showing signs of strong growth, there are contrary markets like Spain that are showing signs of a prolonged recession.

“The real estate market’s near-term future is all about the strength and timing of the economic recovery, added Dr. Peter Linneman, NAI Global chief economist and principal at Linneman Associates. “Job growth will be key, as a recovery without jobs does not fill much space. As jobs are created, nearly two million new households will form and consumer confidence will rebound, leading to a rebound in corporate profits and economic stability. The momentum building at the end of 2010 points to a hopeful outlook for 2011.”