The bigger picture.

Coldwell Banker Commercial recently released its national overview.

In retail, the South claimed the nation's most active demand for retail space during first half 2004, accounting for more than half the nation's net absorption. In the West absorption ran far ahead of completions, resulting in a substantial drop in vacancy, where overall vacancies remained the nation's lowest.

Retail performed exceedingly well nationwide during the recent period of recession and slump, out-performing all other real estate sectors by wide margins; ongoing consumer spending and ongoing residential development were key to the success

Strong absorption in the South reflected active construction, a byproduct of population growth and residential development. The West, led by strong performances in Phoenix, Sacramento, and Southern California, followed. Absorption performances were mixed in the Northeast and Midwest: the former, led by a favorable performance in Philadelphia, recorded a small net gain while the Midwest was a mixed bag of gains and losses

Forecast: With retail vacancy expected to decrease in all the nation's regions, the national average rate was projected to fall 130 basis points through 2004, to 6.9%.

Led by the South, the national office market appeared to be turning the corner toward recovery. Absorption was substantially positive during third quarter, exceeding construction delivered by about 2.5 million square feet.

With economic recovery firmly underway, the national office market began to show signs of recovery, although the return of full-bloomed good health requires time

With the exception of the Midwest, which held steady at 18.9%, all of the nation's regions saw decreases in vacancy during the latest quarter

Forecast: The year overall was expected to bring a 40 basis point decrease in average vacancy, to 16.6%, as the gradual recovery of the market proceeds. Rental growth was not yet ready to turn the corner.

The national industrial real estate market proceeded farther along the road of recovery. The Riverside-San Bernardino (the "Inland Empire," located directly east of Los Angeles and Orange counties) led the region--and the nation--at 1.5 million square feet. The 3.7% increase in occupied stock seen there was the most robust performance nationwide

Relative weakness on the other hand, was recorded for those markets in both South and West that claimed large proportions of flex space, such as Raleigh-Durham, Austin/San Jose and San Francisco 

Vacancy, was best in the West, at 10.4%, although levels vary greatly from place to place

Forecast: The latest forecast calls for a 20-basis-point decrease in industrial vacancy to 11.6% through 2004 while the average asking rent was expected to grow 0.2%.