The commercial real estate (CRE) market entered the second quarter of the year with persistently rising vacancy rates and slowing rent growth across most market sectors. Specifically, the office vacancy rate reached new record highs, approaching nearly 14%, while fundamentals in retail and industrial sectors decelerated. High interest rates and the effects of hybrid work on office spaces are the main factors that continue to hamper this sector. In the meantime, the U.S. economy started to slow down after previously exceeding expectations, reflecting the impact of inflation pressures on consumers.
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