UPDATE 1-US commercial real estate vacancies peaking-realtors

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By Corbett B. Daly

WASHINGTON, Nov 29 (BestGrowthStock) – U.S. commercial real estate
vacancy rates have already peaked or will soon top out, though
rents are likely to continue to fall, a realtors group said on
Monday.

The National Association of Realtors said it expects the
vacancy rate for office space to rise a tick to 16.7 percent
this quarter and gradually decline to 16.4 percent in the final
three months of next year.

“Still, high vacancy rates imply falling rents,” said NAR
chief economist Lawrence Yun.

An index measuring conditions in the commercial real estate
sector rose 1.6 percentage points to 42.6 in the third quarter,
well below a level of 100 that represents a balanced
marketplace. The last time the commercial market was in
equilibrium was in the third quarter of 2007.

Although the index remains weak, this marked the fourth
straight quarterly rise.

“The outlook for the office and industrial markets has
moderated with modestly declining vacancy rates expected as
2011 progresses, while the retail sector should hold fairly
steady,” Yun said.

The weak commercial real estate market has been a drag on
economic growth in the past two and half years, subtracting
from gross domestic product in nine of the past ten quarters.

Vacancy rates for apartment rental buildings, which have
been one of the few bright spots in the hard-hit commercial
real estate sector, are expected to fall to 5.8 percent in the
fourth quarter of next year after rising to 6.4 percent in the
final three months of 2010.
(Reporting by Corbett B. Daly; Editing by W Simon )

UPDATE 1-US commercial real estate vacancies peaking-realtors