RCA in the commercial property press:

Jobless Rate Drops; Losses Still Hurt Commercial Real Estate

National Real Estate Investor reports: The United States' jobless rate dipped to 9.7% in January from 10% the month before, catching many economists by surprise, as predictions were for unemployment to actually rise to 10.1%. But analysts warn that trends within the government’s new report indicate a rough road ahead for commercial real estate, particularly for apartment and office properties.

The report by the U.S. Department of Labor reveals a loss of 75,000 construction jobs in January. Many of the declines occurred in non-residential construction and specialty trades, points out Sam Chandan, global chief economist at New York-based research firm Real Capital Analytics. “These are areas of construction that are highly correlated with activity in commercial real estate development and building.”

“The commercial real estate and multifamily industry depends critically on employment,” says Chandan. “We need meaningful, sustained gains in employment before we can expect a stabilization of trends in real estate fundamentals. I think that’s still a way off.”

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Posted by: Matthew Stone

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