It has taken the better part of a decade, but the commercial real estate market may have finally recovered from the Great Recession.
During its Real Estate Forecast event Tuesday afternoon, Newmark Grubb Pfefferle reported the commercial market is seeing activity at the levels it was during the early 2000’s. It’s been a slow recovery, but the ground has finally been made up.
That means finding a vacant place to start or grow a business is not as easy as it was just a few years ago. It also means more construction projects on the horizon, at least for some sectors of the market.
“With most of the Class A office space absorbed in the Appleton Market, I believe you will see significant new construction being announced throughout the year,” says John Pfefferle, Chairman/CEO for Newmark Grubb Pfefferle. “The Green Bay market has a higher vacancy than Appleton, which is caused by a variety of developments but the trend will continue to improve in the office market.”
Bob Bach, director of research and chief economist with Newmark Grubb says the strong correlation between the construction industry and the commercial real estate industry will not change over the next few years. When the leasing market is thriving with vacant buildings have space to fill, there will be less of a demand for the construction market. When vacant buildings are full, then the construction industry will thrive because there will be more of a demand for new space.
“Unfortunately, activity in the construction industry is still low, however this is a good thing for the lease market,” Bach says.
As the pendulum continues to swing, the retail industry is also seeing a change in demand for real estate.
“We are now seeing trends that brick and mortar space demands are going down, and that is because of the transition to online sales and a stronger ecommerce base,” Bach says.
Even as the commercial real estate numbers continue to dip after the recession, experts are still hopeful that the real estate industry will continue to blossom, even though demands are changing.
“I’m very optimistic for the next two years for commercial real estate,” Bach says. “The only thing we have to keep our eye on is prices and how they fluctuate.