From the Arizona Republic- call it what you will, but oversupply and lower lease rates are hurting commercial real estate in Phoenix:
Slow selling homes aren’t the only thing dragging down the Valley’s once-vibrant real estate market.
The commercial real estate market ended 2007 with more vacant space than before, although the picture in the Southeast Valley isn’t as dim as it seems.
Office, industrial and retail vacancy rates rose in the last three months of the year, according to commercial real estate services firm CB Richard Ellis.
But in many cases, the increases came as a result of more inventory and a lag time in filling commercial space.
I think in this case we can safely interpret "more inventory" as "excess supply" and "lag time filling" as "low demand."
A downturn by any other name still hurts as bad.
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Nevada also:
Office space standing vacant amid housing woes
http://www.lvrj.com/business/13702692.html
I didn’t get quite the same read as you did. As huge shopping centers are built, large quantities of retail are added to the supply. VERY RARELY are all the shops filled when a mall/retail location is first opened. Sure, your anchors will be there, but secondary and tertiary locations take time. Unlike homes, where they are generally built to order, you build a million sf mall all at once, then fill it in.
Further, even those buildings that are built and waiting to be occupied. Our company is moving to a new building, but due to tenant improvements required is not yet occupied. That is the lag mentioned.
While certainly not great news, it isn’t the end of the world.
Ingydesu-
Sure it takes awhile to lease out a building, but remember, we had a surge in commercial building when residential started heading south. Now that space has come online.
Spaces aren’t filling as quickly as they used to- and although some projects have cancelled or been put on hold, they continue to build.
I have a friend who’s a small business owner in Gilbert. He said that he was shocked at the rents they were asking 8-9 months ago, but he wasn’t seriously looking to move his business. Now he says he’s getting a lot of calls- owners are willing to wheel and deal on the rents.
Not the end of the world, but it’s a case of commercial following residential.
Retail follows rooftops… both directions.