Commercial real estate investors in Maryland and around the country can expect steady growth and fewer vacancies in the year ahead according to several industry groups, but experts say that the current cycle may be nearing its peak. Robust growth in smaller markets during the fourth quarter of 2016 was offset by declining sales in large cities according to the National Association of Realtors, but the trade association predicts that vacancy rates will decline in all major commercial property sectors in 2017.
The jobs created by a growing economy are expected to increase demand for office space in most major markets, and vacancy rates in the sector are expected to fall by 110 basis points to 12.1 percent. The NAR says that industrial vacancies will decline by 130 basis points to 7.1 percent in 2017, and even the beleaguered retail sector is expected to benefit from increased demand in the year ahead. While vacancy rates in the multi-family sector are not expected to fall, they will remain steady despite a glut of new construction according to the NAR.
The National Association of Real Estate Investment Trusts also expects rental markets to be active in 2017, and commercial real estate prices in February were up 8.5 percent year-on-year according to the Ten-X CRE Nowcast pricing index. While the rate of growth is expected to slow as the economy cools down, a senior NAR economist says that higher salaries and increased consumer spending will continue to support the commercial property market.
Taking advantage of opportunities in the commercial real estate market sometimes involves coping with environmental, permit or survey disputes and dealing with land use issues like annexation or development easements. Attorneys with a background in complex property agreements will likely understand that time is often of the essence in these situations, and they may seek to address these problems quickly to keep projects and transactions on track.