Invest in Austin Commercial Real Estate, New Report Says

A new report from Santa Ana, Calif.-based real estate services and investment firm Grubb & Ellis Co. is forecasting that Austin, Texas, will have the best prospects for commercial real estate investment in 2010. According to the report, commercial real estate will continue to falter this year, but at a slower rate, with most property types reaching bottom pricing near the end of the year with a slow recovery beginning in 2011. The report listed Austin No. 1. in a ranking of the top 10 markets for long-term office, industrial, retail, and multi-housing investment potential; Houston, at No. 6, was the only other Texas city to make the list.

“Because commercial real estate lags the labor market, it still has a way to go before reaching its own low point,” says Bob Bach, Grubb & Ellis senior vice president and chief economist. “The good news is that the freefall we saw in 2009 is over and the future is more certain, giving owners and users of real estate the confidence to begin making decisions again,” he points out.
The investment market will see a slight rebound in 2010, the report forecasts, prompting increased sales volume of 20 to 30 percent. However, it predicts that high office vacancy rates will likely continue and could reach as high as 19 percent by the end of the year.

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