CRE Barometer Reaches Highest Level Since 1990

A leading indicator for commercial real estate market activity rose 0.4% in the third quarter to a 120.1 reading, the highest level since 1990, the National Association of Realtors reports.The Washington-based trade association said this means that the sector is poised for continued growth, with net absorption of industrial and office space improving in the next six to nine months. Also, completions of overall retail, office, warehouse and lodging structures are expected to rise. The NAR expects leasing and sales activity in the first quarter of 2007 to be 2.9% higher than in the first quarter of 2006. David Lereah, NAR's chief economist, noted, "Although we have a strong uptrend in the commercial sectors, the rise in the index over the last two quarters shows a lower rate of expansion in comparison with late 2005 and early 2006. This means that commercial sectors will continue to grow, but at a more modest pace." The NAR index incorporates 13 variables that are seen as reflecting future commercial real estate market activity, with each given a suitable weighing in the index.