Retail real estate still improving, thanks to Millennials

Chicago — Employment growth in science, technology, engineering and mathematics and the continuing recovery in the U.S. housing market have begun to affect all sectors of commercial real estate, according to Jones Lang LaSalle’s “Cross Sector Outlook.”

Total sector commercial real estate volumes in the first three quarters of 2013 have reached $208.82 billion, an increase of 30% over the same period in 2012, said the report.

The continuing growth is fueling occupancy and rent increases and boosting investor demand. In addition, Millennials (adults younger than 34) are becoming a larger component of the workforce and beginning to affect operations across the spectrum of commercial real estate categories.

In the retail real estate category, the JLL report said that vacancy rates should continue to inch down over the next year, as construction remains limited. Lack of new supply will extend the ongoing recovery in rents. Investor interest in the slowly recovering sector is perking up as well with investment sales growing to $33.8 billion in the first three quarters of 2013, an increase of 14% over the same period in 2012.

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