X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

While a US economic slowdown persisting through Q1 and into Q2 will essentially keep economic rent for office space flat in 2008, industrial rent is projected to climb 2.8%, according to the February edition of CB Richard Ellis Viewpoint. The report defines economic rent as market average rent multiplied by market occupancy rate, which provides a measurement equivalent to the change in gross income for occupied space.

Written by Raymond Torto, the firm’s global chief economist, the report shows industrial economic rent increased 5.7% in ’06 and 3.6% in ’07, indicating the downward trend preceded the recent credit crisis. But despite the trend, indications are the decline will not lead to a repeat of the scenario from early in the century, when economic rents actually declined by 4.4%.

In fact, Torto advises major investors to continue investing but to do so cautiously, with appropriate analysis and assumptions undertaken beforehand. “Real estate is an investor’s market, not a trader’s market, and for long-term investors, opportunities will arise from others’ mispricing or misfortune,” he says.

The report lists several markets that demonstrate exceptional strength. Markets anticipated to show substantially higher than average economic rent increases include:

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.