Commercial Real Estate Hit Bottom?
Are we there yet? Are we there yet?
In short, you really can’t tell if you have hit the bottom of the market until several months after you have hit “the bottom.” Up until recently, even some of the top experts in commercial real estate analysis have not been able to predict the bottom.
However, recently Harvey Green and Hessman Nadji, President CEO and managing director of research of Marcus & Millichap suggest that a rebound can be hoped for in 2010, but substantial growth from the companies who survive will be more prevalent in 2011/2012.
The report continued saying that the retail industry will still face “headwinds” in the remaining three quarters of 2009 which include more of a decline in retail sales, job losses, lower rents, and an increase in vacancies.
In my personal research of the St. George retail market, to date there are more than 22 unanchored shopping centers that have at least one vacancy; most of them have several. Anchored retail centers tell the same story and unfortunately more vacancies are on the horizon.
The good news for the recovery of the St. George retail market as well as the rest of the nation, is that as a whole the new retail construction is down 30% compared to last year. This will allow current retail centers to absorb the growth in the next couple of years and improve the overall position of the retail sector.
