According to the latest data from the Federal Reserve Board, the automotive and technology sectors are helping commercial real estate recoveries in some of its districts.
In its Beige Book, released Sept. 7, the Federal Reserve reported on economic activity, including commercial real estate, in the 12 districts of Boston, New York, Philadelphia, Cleveland, Richmond, Va., Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Mo., Dallas and San Francisco.
The Chicago district noted continued strength in industrial construction, particularly in the automotive sector, while San Francisco said some areas have benefited from technology sector growth.
Still, overall, CRE conditions remained weak or had few changes in most districts, the Fed said.
There were some improvements noted by New York, which reported a “noticeable” decline in office vacancy rates in the Buffalo and Rochester metro areas and “modest” decline in Manhattan and Long Island.
Lower commercial rents helped push down vacancy rates in the Kansas City district, and the Dallas district noted strong demand for leased space in Houston due to solid energy activity, according to the Fed.
Commercial construction was characterized as weak or limited by Cleveland, Atlanta, Chicago, and Kansas City, although Atlanta noted some strength in the healthcare sector.
St. Louis described conditions as mixed, with some improvement in education and energy-related construction while the Minneapolis district contacts reported an increase in small retrofitting projects and rebuilding in flood-damaged areas.
Credit for commercial development remained an obstacle for small retailers in the Richmond district, although Boston said aggressive competition among lenders led to reduced borrowing rates.