Bargain hunters are starting to sniff around commercial real estate markets, though retail real estate remains under a heavy cloud.
Apartment and office buildings in Washington, D.C., New York City, San Francisco and Boston are sparking a bit of interest -- a signal that the bottom is nearing.
“While we may not have bottomed completely, investors are looking at fundamentals and future prospects,” says Alan Pontius, managing director at Marcus and Millichap Real Estate Investor Services. “Investors are no longer trying to time the market.”
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Average prices for commercial real estate are likely to keep slipping, though, dragged down by declines of up to 20% in Atlanta, Las Vegas, Phoenix and other areas with a hefty surplus of space. Brighter spots, where prices will flatten out this year, include Los Angeles, Austin, Texas, Washington, D.C., Portland, Ore. and North Carolina’s Raleigh-Durham area.
“The good news is that the freefall we saw in 2009 is over,” says Robert Bach, senior vice president at Grubb & Ellis, a commercial real estate advisory firm.
On the retail front, store closures this year will again be more numerous than usual, though fewer than in either 2008 or 2009.
Rents will soften further, sliding by about 4% after space improvements and other concessions are taken into account. Odds are it’ll take about five years for rents to regain their 2008 highs, even though minimal space will be added -- only 12 million square feet in strip malls this year, for example. That’s 20% more than last year but less than half the typical annual increase over the past decade for the “necessity based” outlets.
Retailers that have the capital are being extremely picky about new space, taking over vacant locations only in prime spots. Big chains are using their funds to redevelop existing stores -- making them better draws, rather than adding space.
For weekly updates on topics to improve your business decisionmaking, click here.
-
The Most Popular Apps for Retirement Planning in 2025A J.D. Power survey ranks retirement planning apps based on customer service and satisfaction. Does your financial app make the cut?
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
Small Businesses Are Racing to Use AIThe Kiplinger Letter Spurred on by competitive pressures, small businesses are racing to adopt AI. A recent snapshot shows the technology’s day-to-day uses.
-
How AI Puts Company Data at RiskThe Kiplinger Letter Cybersecurity professionals are racing to ward off AI threats while also using AI tools to shore up defenses.
-
AI Start-ups Are Rolling in CashThe Kiplinger Letter Investors are plowing record sums of money into artificial intelligence start-ups. Even as sales grow swiftly, losses are piling up for AI firms.
-
What is AI Worth to the Economy?The Letter Spending on AI is already boosting GDP, but will the massive outlays being poured into the technology deliver faster economic growth in the long run?
-
Kiplinger Special Report: Business Costs for 2026Economic Forecasts Fresh forecasts for 2026, to help you plan ahead and prepare a budget on a range of business costs, from Kiplinger's Letters team.
-
Trump-Era Regulations Will Broaden Access to CryptoThe Kiplinger Letter The president wants to make the U.S. the leader in digital assets.
-
How to Adopt AI and Keep Employees Happy
The Kiplinger Letter As business adoption of AI picks up, employee morale could take a hit. But there are ways to avoid an AI backlash.
-
The Rise of AI: A Kiplinger Special ReportThe Kiplinger Letter Our special report looks at the opportunities and challenges of generative AI and how its rapid move into the mainstream is impacting every aspect of our lives.
