In the fall our industrial forecast called for about a 6 percent rise in industrial rents. The national multi-housing outlook is positive with an expected decrease in the vacancy rate and an increase in rent growth. Construction in the multi-housing sector is starting to increase, but demographic conditions will keep demand strong. In contrast, the national retail outlook will be weaker from 2000. Completions of neighborhood and community centers are expected to continue growing, while demand will slow with an expected drop in retail sales.
Retail analysis is coverage of neighborhood and community centers.
The office sector is expected to continue its strong performance but with lower rent growth from the outstanding showing in 2000. Supply will continue to grow steadily, with a minor weakening in demand resulting in a slightly higher vacancy rate of 9.3 percent by year-end. The full segment hotel sector is expected to weaken in 2001. We expect supply growth to outpace demand growth, leading to a decrease in the occupancy rate from 71.4 percent in 2000 to 70 percent in 2001. Real room rates are expected to continue growing at a steady 2 percent given market conditions.