According to the National Real Estate Investor, the recent release of job losses and the unemployment rate point to concern for the commercial real estate industry, especially office and retail space.

With the unemployment rate rising to 6.7%, more companies reducing staff and going out of business and rising costs for doing business, the demand for space is diminishing. This decline in employment has been parallel with that of the mid-seventies in regard to one month losses. Earlier this year losses were much smaller and were mostly in the construction and manufacturing sectors. Now empty space is also contributed to by a lack of money available to businesses that depend on financing to continue operations. Some smaller business are moving to smaller space or moving their operation to their residences.

There are some indicators that there may be light at the end of the tunnel. The heavy job losses of the mid-seventies occurred only 4 months before the end of that recession. This holiday shopping season is gaining momentum and could prove beneficial to the struggling retail sector. Talk in the housing markets hints at some real improvement in mid to late 2009.

To view the full article, visit: http://nreionline.com/finance/news/high_job_losses_sink_demand_1205/

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