Has Commercial Real Estate Performance Turned the Corner?
Apartment and Office Sector Performance Defy Expectations
U.S. Multifamily Market Momentum Defies Expectations
U.S. multifamily vacancy fell in 3Q 2024, despite record completions
Apartment demand was robust in 3Q 2024, with net absorption reaching the strongest level since mid-2021
A persistent housing shortage and improved economic sentiment are sparking household formations and fueling rental demand
Regional Absorption Patterns Highlight Sunbelt and Key Metros
Sunbelt markets lead in multifamily net absorption, due in part to their high concentration of new unit deliveries
Vacancy compression is notable in markets with fewer completions and solid demand, like D.C., Portland, OR, and San Francisco
Multifamily demand expected to keep pace with construction in 2025, likely sustaining these regional trends and declining U.S. vacancy
Office Sector Exhibiting Gradual Rebound
U.S. office net absorption reached a near-2-year high in 3Q 2024, reducing the national vacancy rate
Minimal new construction should continue to support vacancy compression; however, fundamentals are moving slowly
Return-to-office policies becoming more prevalent, providing a potential tailwind, but office tenant demand appears bifurcated
*Through 3Q
Sources: Marcus & Millichap Research Services, RealPage, Inc.
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