Due to a significant amount of lateral absorption within the metropolitan area, rental rates should stabilize with only slight changes in occupancy levels. As lenders take on a more disciplined approach, absorption has begun to outpace supply in the Dallas Metroplex. Over 5 million square feet of office space was absorbed with just over 3 million square feet of new construction. The west coast may contain some of the most volatile real estate markets, but currently some of the hottest in the country. However, office space remains in demand and Proposition M is still in effect, restricting new construction in the city to 875,000 square feet per year.
Market equilibrium seems to be prevalent world-wide, for the most part.
Even though it could make a brief pit stop in the near term, look for this hot rod to stay on track for at least a few more laps. In conclusion, we see a relatively stable marketplace for office, industrial and retail real estate. Most developers have slowed the speculative construction in the US due to concerns of the economy. Therefore, as the market stabilizes and, in most cases, increases in absorption by a few percentage points, the commercial real estate industry should be in equilibrium.