CB Richard Ellis Releases Market Forecast

There were no major surprises  in a generally glum report released this week summarizing 2008-2009 trends by commercial/industrial/retail broker CB Richard Ellis (CBRE). However, CBRE reported that the St. Louis region appears to be faring somewhat better than its counterparts in other ares of the country.

The following are some of the major points for 2009 from the CBRE report:

Office
• Vacancy rates likely to rise
• South County faces influx of available Anheuser-Busch space
• Renewing tenants will be critical for landlords
• Concessions, including free rent, will be prevalent
• Ability of projects such as Ballpark Village to get financing will impact the market in 2009 and beyond

Industrial
• Most activity is from users looking for between 30,000 square feet and 60,000 square feet
• Speculative construction has slowed considerably
• South County’s exposure to Chrysler and its suppliers makes it vulnerable, now that the car company has shut down one plant and slowed production at the other
• A tenant’s market has emerged, with some “oncein-a-lifetime” deals featuring lease rates as low as $1 per square foot

Retail
• Rate of development expected to slow significantly
• Projects seeking financing will have to have significant pre-leasing committments
• “Power Centers” with name-brand anchors such as Wal-Mart, Best Buy and Target will continue to do well as retail destinations
• Smaller, neighborhood centers located in areas that receive less traffic are likely to struggle

To download the complete report, go to this link.

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