May 17th, 2011
Impact on Commercial Real Estate - Job Growth
- Growth in retail spending and the addition of retail jobs this year have not generated an appreciable increase in retail space demand, as vacancy was flat in the first quarter at 10 percent. Large, national retailers continue to re-staff well-performing stores but are still hesitant to expand, while the formation of small, local retail businesses remains hampered by a lack of credit. Additional gains to total employment and improvements in other economic gauges over the coming quarters will start to override caution, though, leading to a 50 basis point drop in the retail vacancy rate this year to 9.5 percent.
- The ongoing recovery in travel and hotel room demand supported the creation of 3,800 hotel jobs last month and 24,000 positions year to date. Estimated occupancy in April was 61.2 percent, up from less than 59 percent in 2010, with strong gains in business-reliant midweek periods. In addition, the average daily rate rose an estimated 2.5 percent last month, although lower business rates negotiated last year continue to limit the amount owners can increase rates.
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