LOS ANGELES—Evidence continues to roll in that although thedomestic economy still has its share of weaknesses, US commercialreal estate is powering ahead. CBRE Group reportedMonday that the third quarter saw across-the-board strengthening,with office in particular making its strongest showing in eightyears.

“The real estate recovery clearly gained in strength in thethird quarter as all property types saw notably improved demandtrends,” says Jon Southard, managing director ofCBRE's Econometric Advisors group. “Especially important, officetenants showed greater confidence in expanding their footprint andfinally appear to be shaking off the lingering effects of therecession.” Q3's office vacancy decline of 40 basis points to 14.1%was the steepest quarterly drop since Q2 2006, while industrialavailability declined 20 bps from the previous quarter, as did thatof retail.

A report last week from Cassidy Turley alsocharted the quarterly progress that office made in Q3. The 80 USoffice markets tracked by the firm absorbed 20.5 million squarefeet during the quarter, an increase of 20% from Q2 and a 38% riseyear over year. Kevin Thorpe, chief economist withWashington, DC-based Cassidy Turley, makes the linkage betweenstronger employment trends and tightening officesupply.