SIOR: CRE Markets Not Rebounding Yet

Commercial real estate markets have not yet begun their rebound to market equilibrium, according to the 2Q 2008 SIOR Commercial Real Estate Index, compiled by the Society of Industrial and Office Realtors in association with the National Association of Realtors. In the survey, 83% said their local markets are feeling the impact of the decline in the national economy -- 59% higher than a year ago. Leasing activity is down, according to 75% of respondents, while 23% believe virtually no new construction is going on in their marketplace, the SIOR reported. Half the respondents predict a 1%-15% decline in activity for the third quarter. The index indicates that the office market has been hard hit, scoring only 67.8 points, down almost 48 points from a year ago. The industrial market index, at 68.5 points, is more than 53 points off its first-quarter 2006 high. Underperforming all regions, the Midwest tallied a score of 73.1 -- the lowest index value for the second quarter. Respondents from the South, with a score of 84.6, were the most optimistic about the next three months. The West, weighing in with a score of 68.4 points, experienced the greatest decline in positive attitudes regarding the office and industrial markets.