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Healthy 2014 performance for US real estate market

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The real estate market witnessed healthy performance in the US last year, with the office market seeing the best performance since 2007, according to a new release from CBRE. 

Continued health in the office market points to opportunities for those looking to invest in the space. However, the office market wasn't the only sector to see improvements.  

"The commercial real estate market continues its broad-based, steady improvement," explained Jeffrey Havsy, the chief Americas economist for CBRE. "Continued economic growth combined with muted supply, should lead vacancy rates to fall even further in 2015."

The vacancy rate in the office market declined by a total of 20 basis points from the prior quarter to hit 13.9 per cent in the final quarter of 2014. This is 100 basis points lower than the previous year, and the best performance since 2007.

This also means the office market has seen 10 consecutive quarters of 'lower or stable vacancy'.

"We do expect office space demand to remain strong during 2015, fuelled by healthy expansion, low inflation, and the internal stability of the U.S. economy,' Mr Havsy said.

In the industrial market, the availability rate declined to 10.3 per cent in Q4 2014, with the current availability rate down 100 basis points since 2013. Recovery in this market has now stretched to 18 consecutive quarters.

In addition, 10 markets individually fell 50 basis points or more, with Detroit one of the stronger performers at 70 basis points.  

"The industrial market continues to be a bright spot in the widespread economic recovery taking place here in the U.S," Mr Havsy said. "We expect strong performance to continue as conditions remain ripe for further growth."

Following such a strong final quarter for 2014 this year looks to continue on a strong track to recovery.

Date Published: 18 Jan 2015
Category: General News

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