Geopolitical risk tempers positive outlook for 2007.

Commercial property markets across the globe continued their steady climb in 2006, with 2007 promising continued growth, according to the 21st annual Global Market Report issued by NAI Global, the world's largest network of independently owned commercial real estate brokerage firms.

However, the 2007 Global Market Report concludes growth could be hurt by increased geo-political concerns in major markets worldwide.

"Commercial real estate fundamentals are strong in most major markets around the world," stated NAI Global president & COO Jeffrey M. Finn.

"In some of the fastest growing markets of recent years, the biggest issues we're seeing are political in nature. From efforts to rein in the hot economy in China, to new governments in Chile, Peru, Ecuador and Peru in Latin America, to lingering political favoritism in the European Union, market risk pales in comparison to political risk factors for several geographies. More than ever, it's imperative for companies to find a local partner on the ground that has the market experience needed to navigate through these challenges."

The 2007 Global Market Report features data and analysis on office, industrial and retail market performance in 2006 for over 200 locations worldwide. Narrative reports and statistical charts provide market highlights, trends, demographic and business profiles, rental rates, vacancy rates, and land prices. All of the market information included in the report is available online at www.naiglobal.com.

"Our annual Global Market Report is a unique resource that combines the strength of our network--deep local market knowledge and broad geographic coverage--and the keen insight of our Chief Economist, Dr. Peter Linneman," stated Finn. Linneman is Professor of Real Estate at The Wharton School, University of Pennsylvania, and principal in Linneman Associates, a Philadelphia, Pennsylvania-based research consultancy.

In 2006, U.S. markets reported generally tightening vacancies, particularly in downtown areas. The elimination of the remnants of the dot-com bust and other factors caused a decline in Class A downtown office vacancies rates to 9.85% in 2006 from 11.91% a year earlier. This led to slightly upward trending rental rates for the sub-sector, from $34.37 per square foot in 2005 to $36.02 in 2006.

While vacancy rates show signs of increasing, this seems to be caused by new supply entering the market. The outlook for 2007 calls for steady growth as excess liquidity holds investment yields relatively low and developers respond cautiously with additional office development projects.

A few select regional market findings from the report include the following:

Boston: A dearth of retail-zoned land has led to skyrocketing lease rates and vacancy rates as low as 5%. In areas like Newbury Street, rents have soared as high as $140 per square foot, almost $100 higher than a decade ago.

Chicago: An improving local economy has the office market inching toward recovery. Retail markets continued to improve.

Los Angeles: Sales prices have reached new highs for all property types and cap rates are at record lows in the face of intense competition. The local economy remains strong and continues to drive demand in the Southland.

New Orleans: Industrial space remains tight throughout the area, while the downtown office market has displayed surprising resilience. An enormous rebuilding task lies ahead, but as the business climate continues to settle, companies will be better equipped to assess their real estate requirements.

New York: Steady demand from the banking and legal industries have combined with declining supply to push office vacancies below 6% for the first time in five years. Despite rising rental rates, New York remains inexpensive compared to London and Hong Kong, but the gap continues to close.

Washington, D.C.: Commercial vacancy rates fell slightly from 7.9% in 2005 to 7.6% in 2006.