NAI report reveals postive outlook for national recovery.

NAI has released its annual NAI Global Market Report (formerly known as the NAI Real Estate Planning Guide), which surveys the current state of the commercial real estate industry, and provides trends and forecasts on a local, regional and global level.

These overviews, as well as a ranking of top cities for each region, are based on detailed, individual reports for 196 key markets that combine a narrative overview with statistical charts showing economic profiles, rental rates, vacancy rates and land prices gathered by experts at local NAI offices throughout the world.

According to Dr. Linneman's analysis in the NAI 2004 Global Market Report, "The U.S. real estate markets are poised for growth, as new construction has been largely stopped, and demand is starting to pick up, fueled by economic growth.

"While demand for real estate will lag the economic recovery, positive absorption will cause vacancy rates to slowly fall over the next five years. Within 18 months, rental rates will stabilize and begin to creep upward."

Dr. Linneman describes the paradox of the growth of employment in the midst of manufacturing declines as a continuing changeover to new economy industries.

For instance, he explains, 10 years ago such positions as Internet strategists or in the newly formed U.S. Department of Homeland Security didn't exist. He continues by pointing out that within the real estate industry, there are also new categories of property that didn't previously exist, such as co-location facilities and senior or assisted living facilities.

Thus, by simply comparing the manufacturing industry and related properties to the numbers from previous years, you are not getting the full picture of the transformation talking place in the economy. In his keynote presentation in New York City, Dr. Linneman compared this phenomenon to the evolution from agriculture to manufacturing, whereby jobs and land were both converted over to new uses.

On the international front, strong foreign investment into China, as well as its entry into the World Trade Organization in December 2001, have contributed to its emergence as the fastest growing economy in Asia, with a GDP growth rate of 7.4% in 2003. With India's economic growth rate nearing 6%, the nation has one of the fastest growing economies in the world and, at this pace, will become a developed country by 2020.

Throughout the Asian markets, government reform, new initiatives and investment in infrastructure, as well as increased foreign investment, are paving the way for change and growth throughout much of the region.

>From the SARS crisis in Toronto to the scare of Mad Cow Disease, Canada suffered from more than its share of bad news in 2003. Yet the country demonstrated its resilience by maintaining employment and economic growth throughout the year, and investment property values have held steady or even increased during 2003. Canada's future growth is closely linked to the U.S. economic recovery, and thus most are taking a wait-and-see perspective.

Difficult economic conditions and weak property market fundamentals remain the case across Europe. Yet, despite soft lease rates, and flat to increasing vacancy rates, investment in commercial properties continues to be very active.

Growth in real GDP is expected to increase from the disappointing 0.4% in 2003 to 1.8% in 2004, with low inflation and interest rates. New development has virtually stopped throughout the region due to decreased demand and oversupply, and this will lead to absorption of existing space and more balanced supply and demand as the economy recovers, predicted for late in 2004 or early 2005.

In Latin America and the Caribbean, the focus is on the long term and prospect of ratification of the Free Trade Agreement of the Americas (FTAA), and the potential for additional bilateral trade agreements that could be put into place more quickly.

The outlook for 2004 remains positive for much of the region as increased foreign interest, political stability and governmental reforms begin to take effect.