Where Real Estate Rents Are Poised To Jump
Apartment rents are forecast to hike 3.7% on average this year; but tight markets, such as some in California, are apt to jump more.
Industrial and retail space is also tightest in California. Offices are most in demand in Washington, D.C., and New York, in a new commercial real estate forecast this month from the National Association of Realtors.
Washington, D.C., and New York have the lowest office vacancy rates now, about 9%. In Southern California's Orange County and Los Angeles, industrial space has under 4% vacancy. Retail is tightest in San Francisco and San Jose, Calif., along with the New York City bedroom communities in Fairfield County, Conn.
Apartments — the "multifamily" sector — in Sacramento and Orange County, Calif., have the tightest vacancy rate, about two and a half percent.
With tech companies from Apple (AAPL) and Amazon (AMZN) to Google (GOOGL) and Twitter (TWTR) clamoring for office space, commercial real estate brokerage Marcus & Millichap (MMI) puts San Francisco first on its National Office Property Index for 2015, followed by San Jose and Seattle. (See IBD's Inside Real Estate story for more on tech's sweep of office space.) The Marcus & Millichap ranking, unlike the current-vacancy stats from the National Association of Realtors, considers markets where landlords are apt to benefit throughout this year from barriers to entry, low vacancy and above-average employment growth.
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