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'Solid' gains forecast for commercial real estate market

The U.S. commercial real estate market should experience "solid" gains through 2006, the National Association of Realtors said Tuesday.

"Even with a lot of new construction around the country, we are seeing healthy levels of commercial real estate space being purchased, rented and occupied," David Lereah, NAR's chief economist, said in the group's latest forecast for the commercial real estate market.

The group's latest forecast comes as U.S. bank regulators are paying more attention to rising commercial real estate concentrations at some banks. Federal Reserve governor Susan Schmidt Bies said Tuesday that Fed staff members are considering issuing "supervisory guidance" on risk-management practices for commercial real estate exposures.

Analyzing data on 57 metropolitan areas, NAR said the commercial real estate market is improving as vacancy rates decline and rents firm up.

Dow Jones

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