G&E: Prospects Good for CRE in '06

The commercial real estate industry should have another healthy year in 2006, according to an annual real estate forecast by Grubb & Ellis Co., a real estate services firm based in Northbrook, Ill.Job growth will benefit the office and retail markets this year, and "an abundance of capital" will boost investment sales, the company said. Projected new supply of 25 million square feet in the office sector will fall "far short" of expected net absorption of 80 million square feet, reducing the vacancy rate from 14.5% to 12.8% by the end of the year, Grubb & Ellis forecast. "Conditions will be similar to 2005, as the nation's economy continues to expand," said Robert Bach, national director of market analysis at Grubb & Ellis. However, he cautioned that "there are imbalances in the economy that could slow growth as early as the second half of 2006 or even bring the expansion cycle to an early conclusion." The company can be found online at http://www.grubb-ellis.com.