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Expected growth pushing commercial property demands

While many of sectors that enjoyed post-recession gains have slowed in growth, an area that has lagged may soon be picking up steam. According to the CEO of a leading commercial real estate broker, the office space sector is now showing signs of full recovery and signals point to growth for investors. The growth in demand for office space is expected to lead commercial property gains. The CEO clarifies why this segment is late to the game and the reasons for investors to expect future growth.

Part of the problem with late gains is related to the terms by which businesses contract space in office buildings. Long-term leases continued during the recession despite the fact that companies no longer needed the space due to shrinking their work forces. As businesses began growing their employee rosters after the recession, they naturally utilized the space that had already been leased instead of taking on new obligations.

At the present, undeveloped commercial property is more valuable and costs of construction have gone up. This is seen in the decline of office space vacancies, which the CEO claims will soon spur the need for new developments. A projected 600,000 new professional and business employees by the end of the year further supports expectations of demand for new office buildings and other commercial property.

As investors and developers look for opportunities to capitalize off new growth, they may encounter zoning and other issues related to the financing of new office buildings. In other cases, entrepreneurs may be slowed by legal hurdles in efforts to revision existing properties into commercial real estate. An experienced attorney with deep knowledge of the commercial property sector can spot potential problems early and find solutions to help such clients.

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