Federal Reserve: CRE Construction, Leasing Strengthen
Commercial real estate construction and leasing strengthened since mid-October, the Federal Reserve reported yesterday.
“Commercial construction strengthened modestly in most districts,” the Fed Beige Book said. “The Minneapolis district saw continued strong growth, particularly in cities where commercial permitting increased. The Boston, Cleveland, Atlanta, Chicago, St. Louis and San Francisco districts reported moderate commercial construction growth.”
Office construction grew modestly in the greater Boston region and demand remained strong in the Cleveland district, while the Atlanta District saw CRE construction increase slightly from a year ago and reported “robust” apartment construction, the Fed said. The Philadelphia, Richmond and Kansas City districts reported modest commercial construction growth.
Construction also increased in most major cities in the Richmond Va., district. In contrast, New York reported little change since the previous report. The Dallas district reported that CRE construction remained active, although construction started to taper off in Houston.
Commercial leasing activity also increased. The Cleveland district reported strong leasing growth, while leasing in the Boston, Richmond and San Francisco districts expanded moderately.
“Commercial real estate improved in the Atlanta district, with increased absorption and rent growth across property types,” the Fed said. “Improvement in the Chicago district was widely distributed across the retail, industrial and office segments, with increased demand for both sale and lease properties.”
Fed contacts in the St. Louis district reported slightly higher demand across all sectors and expect demand to remain the same or increase slightly in early 2016. In the Minneapolis-St. Paul area retail, office and industrial space all saw positive net absorption and lower vacancy rates. Demand for commercial leasing increased mildly in the Dallas district, with strong office space activity in the Dallas-Fort Worth area. Commercial leasing activity in New York held steady since the October report.
