CRE Market Conditions in the West: Slow but Steady Improvement


Federal Reserve Bank of San Francisco

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April 5, 2013

This RE Lending Risks Monitor discusses key trends in commercial real estate markets and related lending issues, geared towards lenders within the 12th Federal Reserve District (nine western states).

A combination of slow but steady economic growth and limited construction (except apartment) meant that vacancy/availability rates generally fell across property sectors and markets in 2012. The apartment sector continues to have the strongest fundamentals with vacancy rates below long term averages in most 12th District markets. The retail sector is the weakest with vacancy rates near long term highs in most markets. The slowly improving fundamentals are not enough to spur significant construction activity, but CRE lending is picking up.