Realtors report upswing for office, industrial spaces

The Connecticut/western Massachusetts chapter of the international Society of Industrial and Office Realtors in its semiannual survey of the society’s membership reported increased activity and continuing improvement on the national front from the last half of 2013 to the first half of this year.

The society claims 3,000 members in 580 cities in 26 countries; the Connecticut/western Massachusetts chapter, based in Monroe, has 50 members.

Regarding overall market conditions, 60 percent of the membership indicated improvement and 40 percent said they saw no change in market conditions nationally.

Predictions for the rest of 2014 are optimistic, with 50 percent indicating improvement and 40 percent predicting no change; 10 percent said they anticipate a decline in market conditions.

The majority of members said they do not expect lease rates to change in the second half of the year. Industrial lease rates are expected to remain unchanged by 93 percent of members, with 7 percent predicting an increase.

Office lease rates are also generally expected to remain unchanged, according to 80 percent of the society’s members, while 14 percent expect a further decline and only 7 percent expect an increase.

Expectations regarding the direction of market vacancy rates are positive, the society reported. Industrial vacancy rates are expected to decrease, 67 percent of members said, or to remain unchanged (33 percent).

A majority of members reported they believe sale prices for industrial and office product as well as cap rates will be stable for the remainder of 2014. Survey responses for industrial properties indicate stable pricing (71 percent) with the remainder anticipating upward pressure on pricing (29 percent).

Expectations regarding corporate growth for the remainder of the year are largely unchanged, with the majority predicting status quo (75 percent) and the remainder divided between expansion (15 percent) and contraction (10 percent).