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Austin Commercial Real Estate Market Ranked #1 Investment Opportunity

published on January 21, 2010

According to Grubb & Ellis Co., which is a real estate services and investment firm based in Santa Ana, California, Austin offers the best commercial real estate investment opportunities for 2010.

Although the experts at Grubb & Ellis Co. do predict that the commercial real estate market will continue to have difficulty throughout the rest of the year, the rate of decline will likely slow this year. Furthermore, the investment firm predicts that most property types will bottom out near the end of 2010 and that a slow recovery will begin in 2011. 

When determining the markets that provide the greatest commercial property investment opportunities, the firm considered the long-term industrial, office, multi-housing and retail investment potential of each market. Of the top 10 markets listed by the investment firm, Austin came in at the number one position. The only other Texas market included on the list was Houston, which came in at number six.

"Because commercial real estate lags the labor market, it still has a ways to go before reaching its own low point," stated Bob Bach, who is the senior vice president and chief economist of Grubb & Ellis, in an Austin Biz Journals article. "The good news is that the freefall we saw in 2009 is over and the future is more certain, giving owners and users of real estate the confidence to begin making decisions again.

Officials from Grubb & Ellis Co. predict that the investment market will see a small rebound in 2010 as some assets enter the market. This shift should then result in a 20 to 30 percent increase in sales volume. Nonetheless, office vacancies, which are already at a record high, will likely continue and may reach as high as 19% by the end of the year.

The fact that Austin is leading the pack in terms of commercial real estate investment potential doesn’t come as much of a surprise to Austin’s residents and real estate experts. After all, Austin’s economy has faired better than most cities throughout the state as well as throughout the country over the past couple years. Furthermore, the Home Builders Association of Greater Austin as well as the Austin Board of Realtors have both determined that the city’s housing market as nearly stabilized and may even see a rebound this year. As such, it only make sense that the commercial housing market isn’t far behind.

Eric Bramlett is the broker & co-owner of One Source Realty, a boutique Austin real estate brokerage.  Eric specializes in Austin condos & Steiner Ranch real estate.

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