The commercial real estate market is an ever-changing industry that requires endless monitoring, systematic analyses, and strategies for change/growth. These sentiments pack so much more punch when you consider the global economic and political uncertainties we face after the completion of our current election. Nevertheless, our commercial title and escrow officers are working with commercial real estate market analysts to bring you five trends that are impacting the current real estate market now and in the months to come.
From a local perspective, the commercial real estate market in Phoenix is demonstrating some growth and expansion, but not in all markets. For example, the multifamily market has seen significant increases in vacancies, rent rates, and transaction activities. Our market analysts are projecting an improvement in this market with rents steadily rising, especially since rents rose over 8% over the past 12 months. Other markets that seem to be in a relatively healthy state include medical offices and general office space leasing.
Currently, medical offices are seeing steady vacancy rates with rent rates and tenant demands rising. While it’s too soon to determine whether or not these trends will continue into 2017, the current activity alludes to high tenant demands in the coming months. If this is true, expectations for tenant demand may rise to the highest they’ve ever been in decades. Office spaces are also seeing some of the strongest quarters they’ve had in years.
According to the market analysts at Colliers, healthy job growth in the Greater Phoenix area has lead to a successful quarter for office space leasing and sales. Vacancies, rent rates, and net absorption are all on the rise with net absorption totals surpassing 4.7 million square feet in the last year. While these may be great signs for the Phoenix area specifically, there is some uncertainty that surrounds the national and global markets.
The National Real Estate Investor has reported that the economic landscape for the U.S. should continue to grow moderately with the addition of new jobs, but this is highly dependent on the outcome of President Trump’s economic plans. Currently, the U.S. employment gains are strong with unemployment dropping below 5.0 percent. This is ideal for many reasons. First, a lower unemployment rate can eventually lead to an increase in demand for housing (residential real estate). Second, a low unemployment rate signals job creation, which will increase the demand for commercial real estate transactions, such as leasing and selling office space in retail and industrial/distribution facilities.
There is still much that needs to be investigated, and many of the people working within the residential and commercial real estate industries know these markets can be fickle. As a leader in title and escrow services that range from simple closings to complex, multifaceted commercial transactions, Landmark Title Assurance Agency wants clients to know they’re here to address your real estate questions. Landmark’s commercial title and escrow officers understand the nuances and know what needs to be done to make sure your investments and real estate transactions close successfully.
To speak to a member of our team, please contact 602-748-2800 today!