Landlord Concessions Help CRE Recovery

Landlord concessions like giving tenants more time to make the rent and agreeing to subleases is helping the commercial real estate sector make a “modest improvement,” according to HousingWire.com.

According to data from the latest National Association of Realtors’ Commercial Real Estate Index, subleasing remains high and lenders are more lenient in allowing for extra time for tenants to make their lease payments.

CRE development remains stalled in all regions, but acquisitions are increasing and one CRE economist told HousingWire that, “the odds that it will transition to a self-sustaining expansion by 2011 remain better than 50%.”

The NAR CRE Index estimates that vacancy rates are expect to increase slightly from the second quarter this year to the second quarter of 2011, then begin a slow decline in the second half of next year.

Currently, retail vacancy rates remain largely flat, but industrial vacancy rates continue to grow.