Multifamily, other commercial markets improving

The Multifamily market is showing improvement.

A report from the National Association of Realtors showed that property management companies should have seen increases in the commercial real estate recovery overall, with the multifamily market improving significantly.

The multifamily market had an estimated vacancy of 4.5 percent during the second quarter, and this figure is expected to continue to fall to 4.3 percent by the same point in 2013, the report explained. In addition, apartment rent increased by an average of 2.2 percent in 2011, and this is projected to increase at a rate of 4 percent this year and 4.1 percent next year.

"Ongoing job creation, which is at a higher level this year, is fueling an underlying demand for commercial real estate space, assisted by a steady increase in consumer spending," said Lawrence Yun, chief economist for NAR. "The pattern shows gradually declining commercial vacancy rates, with consequential but generally modest rent growth."

The report added that net absorption should increase by a rate of 215,900 units in 2012, and this could rise to 230,300 next year. This could be further helped by ongoing economic improvements, which may encourage consumers to rent since mortgage lending is still tight.

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