At the beginning of 2006, the office sector continues to recover but has yet to reach equilibrium in the majority of U.S. markets. The multi-family sector is roughly at equilibrium, while the industrial sector has moved into the expansion cycle, featuring rising construction and rental rates. The retail sector, however, appears to be slightly off its peak, judging from uneven holiday sales. Expect the office, industrial, and apartment markets to tighten further in 2006, while the retail market may downshift modestly as high energy prices and slower home-price growth impact spending and leasing activity.
This market update information was provided by Bob Bach, national director, market analysis, Northbrook, IL-based Grubb & Ellis Co. (www.grubb-ellis.com).